Thông tư 119/2015/TT-BTC

CIRCULAR

GUIDING THE MECHANISM OF FINANCIAL MANAGEMENT TO THE SMALL AND MEDIUM-SIZED ENTERPRISE DEVELOPMENT FUND

Pursuant to the Law on state budget dated 16/12/2002;

Pursuant to the Law on credit organizations dated 16/06/2010;

Pursuant to the Enterprise Law dated 29/11/2005;

Pursuant to Decree No. 215/2013 / ND-CP dated 23/12/ 2013 of the Government regulating the functions, tasks, powers and organizational structure of the Ministry of Finance;

Pursuant to Decree No. 56/2009 / ND-CP of June 30, 2009 of the Government on development assistance to small and medium-sized enterprises;

Implementing Decision No. 601/QD-TTg dated 17/04/2013 of the Prime Minister on establishment of small and medium-sized enterprise development fund

At the request of Director of Department for Finance of banks and financial organizations

The Minister of Finance issues this Circular guiding the mechanism of financial management to the small and medium-sized enterprise development fund;

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

This Circular guides the mechanism of financial management to the small and medium-sized enterprise development Fund (referred to as Fund) established under Decision No. 601/QD-TTg dated 17/04/2013 of the Prime Minister on establishment of small and medium-sized enterprise development Fund (referred to as Decision No. 601/QD-TTg).

Article 2. Subjects of application

1. The small and medium-sized enterprise development Fund

2. The Vietnam Development Bank and the commercial banks eligible for receiving loans against trust from the Fund (referred to as trustee)

3. Small and medium-sized enterprises as prescribed by law.

4. Other relevant organizations, organs and individuals.

Article 3. Principles of financial management

1. Fund is the state financial organization operating not for profit, performs the functions of financial assistance to the subjects specified in Article 3 of Decision No. 601/QD-TTg and carries out the activities specified in the Charter of organization and operation of Fund.

2. Fund can control its financial aspect and take responsibility for its operation under regulations of law; preserve and develop capital; offset expenditure and risks in operation; operate on the principles of openness, transparency, economy and efficiency under the current regulations of law and the provisions in this Circular.

3. Fund has its own balance sheet, may open account at the State Treasury or local commercial banks as prescribed by law. Fund is exempted from payment of taxes and other payments to state budget under the current regulations of law.

Chapter II

MANAGEMENT OF CAPITAL AND ASSETS

Article 4. Working capital of Fund

1. Charter capital

a) The charter capital of Fund allocated by the state budget is 2,000 (two thousand) billion dong. The roadmap for additional allocation of charter capital to the Fund shall comply with the provisions specified in Clause, Article 5 of Decision No. 601/QD-TTg;

b) The charter capital of Fund is allocated from the following sources:

- The State budget as prescribed by law;

- The development investment Fund;

2. The working capital is annually allocated from the following sources:

a) The non-refundable funding, support and voluntary contribution from domestic and foreign individuals and organization to the Fund;

b) The allocations and loans against trust for investment from domestic and foreign individuals and organization to the Fund;

3. Other legal mobilized capital sources as prescribed by law.

Article 5. Provisions on safety assurance of working capital

The Fund must comply with the provisions on safety assurance of working capital, including:

1. Manages and uses capital properly and efficiently

2. Buys asset insurance and other insurance as prescribed by law;

3. Appropriates risk provision fund as stipulated in Article 6 of this Circular.

4. Complies with regulations on limit of capital, term and loan interest specified in Article 8 of Decision No. 601/QD-TTg and specific provisions in this Circular.

5. Do not mobilize capital in the form of receipt of deposit from organizations and individuals; issue of bills, papers, bonds and make commercial loan from organizations and individuals;

6. Do not use working capital to carry out currency trading purposes, investments in securities, real estate, financial investment and other business activities.

7. Use unemployed capital to deposit at commercial banks with high-quality operation as classified by the State Bank of Vietnam.

8. Take other measures to ensure the capital safety as prescribed by law;

Article 6. Appropriation of risk provision fund and risk settlement

1. Principles of appropriation of risk provision fund:

a) Compensation for losses from failure to recover capital trusted to the trustee of Fund;

b) The rate of appropriation of risk provision fund is determined by 0.75%/year based on the total actual year-end debt balance;

c) The appropriation of risk provision fund is included in the expenditure of Fund. At the end of year, if the risk provision is not used up, its balance shall be forwarded to the following year.

The amount of money recovered from loans against trust with its handled risk is accounted in the other incomes of Fund in accordance with accounting regulations.

d) The time for appropriation of risk provision fund is at the end of annual accounting period.

2. The Fund management board issues regulation on appropriation, management and use of risk provision fund for uniform implementation.

Article 7. Assets management

1. The Fund shall develop the Regulation on management of investment, construction, procurement and management of fixed assets and submit it to the Fund management board for approval as stipulated in the Charter of Fund organization and operation and other relevant regulations of law;

2. Investment, construction and procurement of fixed assets of Fund:

a) The authority to decide the projects of investment, construction and procurement of fixed assets of Fund is specified in the Charter of Fund organization and operation;

b) The order and procedures for investment, construction, procurement and repair of fixed assets, the Fund shall comply with regulations of one-member limited liability companies in which the state holds 100% charter capital. The Fund shall have the property insured as prescribed by law;

c) The investment and procurement of travelling means for the operation of Fund shall comply with the norms as prescribed for one-member limited liability companies in which the state holds 100% charter capital;

d) The Fund shall carry out its investment and procurement of assets in service of Fund operation within the Fund capital source;

3. The principles of depreciation appropriation, regulation on management, use and the time for depreciation appropriation of fixed assets: The Fund shall comply with the regulation on depreciation of fixed assets applied to one-member limited liability companies in which the state holds 100% charter capital;

4. Leasing, mortgage, pledge of fixed assets

a) The Fund has the right to lease, mortgage or pledge its fixed assets on the principles of efficiency, preservation and development of capital as prescribed by law to one-member limited liability companies in which the state holds 100% charter capital;

b) The level having the authority to approve the project of investment, construction and procurement of fixed asset is the competent level which decides the leasing, mortgage, pledge of fixed assets;

5. Disposal, assignment and sale of fixed assets:

a) The Fund has the right to assign, sell or dispose the fixed assets which are out of use, have outdated technology, no need of use or are unusable;

b) The level having the authority to approve the project of investment, construction and procurement of fixed asset is the competent level which decides the disposal, assignment and sale of fixed assets;

c) The order and procedures for disposal, assignment and sale of fixed assets of the Fund shall comply with the regulation of law applied to one-member limited liability companies in which the state holds 100% charter capital;

6. Inventory of assets and re-assessment of fixed assets:

a) The Fund must organize its periodical or irregular inventory to identify a number of fixed assets in the following cases: upon closing of accounting books to make the annual financial statement; after occurrence of natural disaster, sabotage or other reasons resulted in the change of its assets; based on regulations of the competent state authorities;

b) For redundant or insufficient assets, the cause and responsibility of relevant organizations and individuals and the material compensation must be identified as prescribed in Article 8 of this Circular;

c) The Fund shall re-assess its fixed assets under the decision of the competent state organ or other cases as prescribed by law;

d) The re-assessment of fixed assets and accounting processing for increasing or decreasing differences of value due to re-assessment of assets shall comply with regulations applied to one-member limited liability companies in which the state holds 100% charter capital;

Article 8. Settlement of Fund loss of assets

Upon loss of assets, the Fund must identify reasons, responsibility and deal with as follows:

1. Identifies objective causes (natural disaster, disease, fire, unexpected accident, political risk) and subjective causes.

2. In case of subjective causes, the person causing loss must make compensation; the Fund management board shall decide or authorize the Fund Director to decide the compensation as prescribed by law and take responsibility for its decision.

3. If the assets are insured, the regulations of law on insurance shall apply;

4. If the loss value is still insufficient after compensation by the money of individual, collective and insurance organization, it shall be accounted in the period costs of the Fund;

Chapter III

LOAND INTEREST AND FEES OF LOAN AGAINST TRUST

Article 9. Loan interest of Fund

1. The loan interest of Fund shall not exceed 90% of commercial loan interest of the same term of Vietcombank, VietinBank, BIDV and Agribank in areas of Hanoi city.

2. The interest of commercial loan for each term is defined on the basis of arithmetic average of loan interest of the same term for enterprises in the priority field of 04 (four) commercial banks specified in Clause 1 of this Article.

3. The Ministry of Finance shall announce the loan interest of the Fund from time to time in accordance with the development of the market. Where the commercial loan interest of the same term specified in Clause 2 of this Article has major changes, the Fund management board shall report to the Ministry of Finance for review and adjustment of interest accordingly.

4. The loan interest is recorded in the credit contract. The loan interest for each disbursement is applied according to the loan interest announced in the most recent time without any change in the loan term;

5. The increasing and decreasing adjustment of interest to some disbursed loans shall be decided by the Fund management board based on the consultation of the Ministry of Finance.

6. The interest of overdue debt to each disbursement is equal to 150% of interest within term for such disbursement.

Article 10. Trust fees for the trustee

1. When receiving trust from the Fund, the trustee shall receive the trust fees as prescribed by the State Bank of Vietnam on trust and trust receipt of credit organizations;

2. The trust fees for the trustee shall be agreed between the Fund and the trustee as prescribed by the State Bank of Vietnam on trust and trust receipt of credit organizations;

Chapter IV

MANAGEMENT OF REVENUES, EXPENSES AND DISTRIBUTION OF FINANCIAL RESULTS

Article 11. Revenues of Fund

The revenues of Fund are the receivables generated in the period, including:

1. Profits of loan against trust.

2. Financial activities.

a) Deposit interest.

b) Fees of management from aid, support, funding or contribution (if any).

3. Other incomes

a) Disposal, assignment and sale of assets;

b) Premium (the remainder after loss compensation)

c) Fines from contract breach;

d) Debts written off with risk provision fund now recovered;

dd) Foreign exchange rate difference (if any);

e) Activities of capacity improvement and assistance to small and medium-sized enterprises under the duties and power of Fund according to the provisions in the Charter of organization and operation of Fund;

g) Other legal revenues as prescribed by law.

4. The Fund must collect the receivables properly, sufficiently and on time in accordance with regulations.

Article 12. Expenditure of Fund

The expenditures of Fund are the ones generated in the period necessary for the activities of Fund, compliance with principles of conformity between revenues and expenditure with valid invoice and document as prescribed by law, including:

1. Expenditure for professional activities

a) Expenditure for mobilization and receipt of funding from domestic and foreign organizations and individuals (if any);

b) Expenditure for trust service fees under the trust contract;

c) Expenditure for appropriation of credit risk provision fund as prescribed by this Circular;

d) Expenditure for insurance as prescribed by law;

dd) Expenditure for exchange rate difference (if any);

e) Expenditure for other professional activities.

2. Expenditure for financial activities: Expenditures related to the deposit at commercial banks and other expenditures;

3. Expenditure for officials and employees according to the regulation of state for one-member limited liability companies in which the state holds 100% charter capital;

a) Expenditure for salary, remuneration and other expenditures with the nature of salary and remuneration to the Fund’s officials and employees.

b) Expenditure for social insurance, health insurance, unemployment insurance to the Fund’s officials and employees.

c) Expenditure for remuneration to the part-time members of Fund management board;

d) Expenditure for meal between shifts, female employees, labor protective equipment, transaction costumes and severance allowances to the employees;

dd) Expenditure for domestic or foreign travelling expenses to the Fund’s officials and employees.

e) Other expenditures for officials and employees as prescribed by law.

3. Management expenditure of Fund

a) Expenditure for depreciation of fixed assets as prescribed by law; asset insurance, repair, maintenance of assets, procurement of working tools (for assets under the Fund’s management);

b) Expenditure for asset loss compensation;

c) Expenditure for leasing of assets and equipment for operation of Fund;

d) Expenditure for conference, seminar, training of official of Fund as prescribed by law to one-member limited liability companies in which the state holds 100% charter capital. The Fund may provide expenditure for meal, accommodation, travelling vehicles for delegates as prescribed by law;

dd) Expenditure for propagation, material printing, reception, transaction, foreign relation, guest meeting, conference and advertising as prescribed by law;

e) Expenditure for inspection, control and audit to the Fund activities;

g) Expenditure for activities of Party organization and unions of the small and medium-sized enterprises;

h) Expenditure for electricity, cleaning, environmental protection and health;

i) Management expenditure as prescribed by law.

4. Other expenditures as prescribed by law.

5. The norm of expenditure specified in Clause 1, 2, 3 and 4 of this Article shall comply with regulation of law to the one-member limited liability companies in which the state holds 100% charter capital. In case of absence of regulation of law, the Fund shall base itself on its financial ability to prepare norm and decide the expenditure to ensure the efficiency and consistency and take responsibility before law;

Article 13. Expenditures not accounted in the operation cost of Fund

1. Damages supported by the State or covered by insurance organ or the party causing damage;

2. Fines due to administrative violation, including: traffic law, statistical accounting law and other administrative violations as prescribed by law.

3. Expenditure without valid and legal invoice or voucher;

4. Expenditures funded by other sources

Article 14. Financial result

1. The financial result of Fund is defined as the difference between the total revenues and total rational and valid expenditures generated in the financial year;

2. The annual financial result is profitable when the difference between the total revenues and total rational and valid expenditures generated in the financial year is positive (+).

3. The annual financial result is lost when the difference between the total revenues and total rational and valid expenditures generated in the financial year is negative (-).

Article 15. Distribution of financial result and loss forwarding

1. The annual financial result is profitable, after the payment of fines due to violation of regulations of law and compensation for losses from the previous years (if any), 100% of the remaining number is distributed as follows

a) Appropriation of 30% for development investment Fund;

b) Appropriation of welfare Fund and bonus Fund:

- In case of completion of annual operating plan approved at the beginning of year by the Fund management board, the Fund may make appropriation from the welfare Fund and bonus Fund with a maximum of 03 salary months in the year.

- In case of completion of annual operating plan approved at the beginning of year by the Fund management board, the Fund may make appropriation from the welfare Fund and bonus Fund with a maximum of 02 salary months in the year.

c) The remaining number after appropriation of the above funds shall be further appropriated in the development investment Fund;

2. When the annual financial result is lost, the Fund may forward the loss to the following year. The time for forwarding of loss shall not exceed 05 years continuously since the year succeeding the year with incurred loss. If after 05 year, the Fund cannot forward all its losses, the Fund management board shall report to the Ministry of Planning and Investment for report to the Prime Minister for consideration and decision.

Article 16. Use purpose of Funds

1. The development investment Fund is used to supplement the charter capital for the Fund.

2. Bonus Fund:

a) The bonus fund is used for periodical or irregular bonus to the Fund’s individuals and collective having technical initiatives and professional procedures that bring the high efficiency to the Fund activities; bonus for collectives and individuals inside and outside Fund efficiently contributing to the Fund’s operational process;

b) The Fund management board shall guide the norm of expenditure for bonus to each subject to the Fund for implementation.

3. Welfare Fund:

a) The welfare Fund is used for expenditure to the sports, cultural, public welfare activities of Fund’s staff; regularly and irregularly expenditure for difficult allowances to the Fund’s staff and for building and repair of Fund’s welfare works;

b) Director of Fund shall make the annual plan for use of welfare Fund to be submitted to the Fund management board for approval after reaching agreement with the Fund’s Union executive committee.

Chapter V

REGULATION ON ACCOUNTING AND AUDIT OF FINANCIAL STATEMENT

Article 17. Accounting

1. Within 01 year after going into operation, the Fund shall apply the regulation on accounting under the current provisions to the local development investment Fund. After the above time, the Fund shall comply with the regulation on accounting guided by the Ministry of Finance.

2. The financial year of the Fund is from 01 January to 31 December annually.

Article 18. Financial statement and information supply

1. The Fund shall make and send the annual and quarterly financial statement to the Ministry of Planning and Investment and the Ministry of Finance, including:

a) Accounting balance sheet;

b) Operation result report;

c) Financial statement explanation;

d) Report on reality of loan against under the Annex 1 issued with this Circular;

dd) Report on financial revenues and expenditure; Report on reality of difference distribution of revenues and expenditure and use of funds under the Annex 2 and 3 issued with this Circular;

e) Annual financial settlement Report;

g) Audited annual financial statement as stipulated by this Circular.

2. The Ministry of Planning and Investment shall approve the annual financial statement specified under Point e, Clause 1 of this Article.

3. Time limit for sending report:

a) The quarterly report shall be sent within 45 days from the end day of quarter;

b) The annual report shall be sent within 90 days from the end day of financial year;

c) The audit result report and the annual financial statement of the Fund done by an independent audit organization shall be sent within 120 days from end day of financial year;

4. The fund shall provide information and irregular report as required by the Ministry of Finance and the Ministry of Planning and Investment and state management organ under current regulations of law.

Article 19. Audit and financial openness

1. The Fund performs the prescribed regulation on internal audit.

2. The Fund’s annual financial statement must be audited by the state audit organ. Where the state audit organ does not plan the audit over the Fund, the Fund’s annual financial statement must be audited by an independent audit organization as prescribed by law. The result and report on audit performance result of the Fund must be sent to the Ministry of Planning and Investment and the Ministry of Finance.

3. The Fund shall carry out its financial openness as prescribed by law.

Article 20. Making the annual financial plan

1. The Fund shall make the annual financial plan to be submitted to the Ministry of Planning and Investment for approval and to the Ministry of Finance for follow-up. The contents of annual financial plan include:

a) Plan for capital source and use of capital funded to small and medium-sized enterprises;

b) The financial plan includes the contents specified in Annex 4, 4a, 4b issued with this Circular.

2. Before 01 December annually, the Fund’s Board of Directors shall submit the annual financial plan to the Ministry of Planning and Investment for approval as a basis for implementation;

Chapter VI

RESPONSIBILITY OF ORGANS

Article 21. Responsibility of the Ministry of Finance

1. Complies with its responsibilities specified in Clause 2, Article 15 of Decision No. 601/QD-TTg.

2. Amends and supplements regulation on financial management to the Fund (as needed).

3. Supervises, examines and inspects the compliance with law on finance and implementation of financial plan through the reporting regulation and laws on inspection.

Article 22. Responsibility of Fund

1. The Fund shall take responsibility before law for organization, operation, management, use and preservation of capital and assets of the State under the Fund’s management and use;

2. Complies with regulation on financial management specified in this Circular and other relevant legal documents;

3. Based on the guidelines in this Circular and documents regulating the state’s financial regulation, issues document specifically guiding the Regulation on internal financial management and Regulation on management and use of risk provision Fund and the professional Regulation;

Chapter VII

IMPLEMENTATION

Article 23. Effect

1. This Circular takes effect from 01/10/2015 and applies from the financial year 2015.

2. Any problem arising during the implementation of this Circular should be reported to the Ministry of Finance for study, amendment and supplementation./.