Ordinance of the Government of the Czech and Slovak Federal Republic No 577 / 1990 Coll.
Ordinance of the Government of the Czech and Slovak Federal Republic on the Financial Management of State Enterprises
Valid
Effective from 01.01.1991
577
GOVERNMENT REGULATION
Czech and Slovak Federal Republic
of 17 December 1990
on the financial management of public undertakings
The Government of the Czech and Slovak Federal Republic orders pursuant to § 36 of Act No. 111 / 1990 Coll., on State Enterprise:
FINANCIAL MANAGEMENT OF THE STATE UNDERTAKING
Own funds of a state enterprise
The own financial resources of the State Enterprise (hereinafter referred to as "the Company ') are:
(a) equity and reserves;
(b) the profit generated by all the business of the firm, as recorded in the accounts (hereinafter referred to as profit) and the funds of the firm to finance its needs, generated by profit.
Capital
(1) Stem capital as a long-term own financial source of the company's assets shall be created from the balance of the basic funds and investment fund, the turnover fund and the securities fund (Article 10 (2) (a)), and shall be adjusted for the transfer of the balance of the development fund pursuant to Article 10 (2) (b) and, where appropriate, Article 10 (3) (b) and Article 11 (2).
(2) The capital at the end of the year may be increased in accordance with Article 3 (3) or reduced in accordance with Article 3 (4).
Reserve Fund
(1) The reserve fund constitutes an undertaking by allocation of profits (accumulation of profits), as a long-term own financial resource to cover losses or to exceed the distribution of profits (hereinafter referred to as "fluctuations in financial management"), to cover the addition of assets not covered by foreign long-term resources or to reduce the participation of foreign long-term resources.
(2) The minimum annual profit allocation to the reserve fund until the minimum balance of that fund is reached shall be five per cent of the profit after its application in accordance with Article 4 (a) (hereinafter referred to as "the applicable profit"). The minimum balance of the reserve fund is 10% of the company's share capital.
(3) The balance of the reserve fund which exceeds the set balance referred to in paragraph 2 at the end of the year may be used by the undertaking to increase its share capital.
(4) If the volume of fluctuations in the company's financial management exceeds the balance of the reserve fund at the end of the year and those fluctuations in the financial management are not covered by a consolidation loan or temporary financial assistance from the relevant budget, the share capital surplus shall be reduced.
Profit
The company uses profit
(a) to cover income and tax contributions, regulatory and price contributions paid from profits, (1) to pay taxes paid abroad or, where appropriate, to pay the premium on premiums under the special regulations, (2)
(b) the allocations to the reserve fund, to the fund of cultural and social needs, to the funds created pursuant to Article 5 (2) and to the expenditure to be paid in accordance with the company's decision, which cannot be included in the costs (hereinafter referred to as "other use of profits"),
(c) transfers of undistributed profits to the next year.
Enterprise funds
(1) The company establishes:
(a) the reserve fund;
(b) a fund of cultural and social needs.
(2) An undertaking may set up additional funds created only by allocation of the applicable profit after application in accordance with Paragraph 3 (2), namely the remuneration fund and other funds at its discretion.
(3) The funds may be deposited by the undertaking in one or more deposit accounts.
(4) The resources of the individual funds referred to in paragraph 2 are mutually transferable. The company may also use the resources of these funds to supplement the allocation to the reserve provided for in Article 3 (2) and to supplement the profit for its distribution.
(5) The undertaking may not cover expenditure from the Funds referred to in paragraph 1 (b) and paragraph 2 above the amount of resources generated by them.
Cultural and social needs fund
(1) A fund of cultural and social needs is created and used by an undertaking in accordance with a special regulation, 3) which also provides for a minimum amount of profit allocation to that fund.
(2) The minimum mandatory allocation to the fund shall be guaranteed from the relevant budget if the applicable profit after the allocation to the reserve provided for in Article 3 (2) is insufficient to meet that allocation, in cases where such a lack of profit
(a) it was not made because of the allocation of profits to funds set up under § 5 (2) or other use of profit under § 4 (b);
(b) is not covered by the balance of the reserve fund or the balance of the funds set up pursuant to Article 5 (2) or, where appropriate, by a consolidation loan or temporary financial assistance from the relevant budget.
Remuneration fund
The remuneration fund may constitute an undertaking by allocation of profits pursuant to Paragraph 5 (2). If the company does not create this fund, it is obliged to finance wage expenditure which cannot be financed as other use of profit under the special rules governing wage resources.
Other enterprise funds
Other funds may form an undertaking solely by allocation of profits under Paragraph 5 (2) and use them at its discretion.
Penalties
(1) The undertaking shall pay periodic penalty payments to the relevant State budget if it fails to comply with the minimum annual allocation to the reserve referred to in Article 3 (2) or reduces the share capital referred to in Article 3 (4) due to the use of profit for the allocation to the funds referred to in Article 5 (2) or other use of profit.
(2) The penalty payment shall be one percentage of the amount by which the undertaking fails to respect the minimum annual allocation to the reserve fund or which it reduces the common equity referred to in paragraph 1.
(3) When fixing periodic penalty payments and paying such periodic penalty payments are treated mutatis mutandis in accordance with a special regulation.4)
(4) The penalty payments referred to in paragraph 2 may, where justified, be authorised by the Federal Ministry of Finance to undertakings under the jurisdiction of the Federal Central Authorities and the competent Ministry of Finance of the Republic to undertakings under the jurisdiction of the Republics.
Transfer of Fund balances
(1) On 31 December 1990, the holding shall transfer the balance of the special-purpose funds, the source of which was, in whole or in part, resources other than profit, to reserves, provided that the accounting rules allow expenditure to be financed from costs with a distinction in time; the balance of the special-purpose vehicles not transferred to the reserves shall be transferred by the undertaking to extraordinary income.
(2) The enterprise shall abolish the following funds by:
(a) transfers the balances of the Fund of basic funds and investments, the Turnover Fund and the Securities Fund into common funds;
(b) transfer the balance of the development fund to Common Equity; However, the undertaking which created this fund and to finance expenditure on the development of science and technology may transfer part of it to a reserve to finance non-investment expenditure on the development of science and technology. Where an undertaking has exhausted the development fund above the amount of resources generated by it and such drawing is covered by bank credit, it shall transfer the fund's balance to the costs of future periods; if such drawing is not covered by bank credit, the balance of the Development Fund shall be cancelled by transfer to Common Equity (reduced by Common Equity).
(3) The undertaking shall use the balances of the following funds:
(a) the balance of the fund of cultural and social needs shall be transferred to further use of the fund to finance expenditure borne by it, 3)
(b) the balance of the remuneration fund may be transferred to further use of that fund to finance expenditure which cannot be included in the costs under the special regulation governing wage resources; where an undertaking decides to finance such expenditure as other uses of profit, it shall transfer the fund's balance to the retained earnings. If an undertaking has exhausted the fund's remuneration over its resources and this excess cannot be dealt with by the reserve fund or is not covered by a consolidation loan or, where appropriate, by a temporary financial contribution from the relevant budget, the company shall cancel the fund's balance by transfer to the common equity (reducing the common equity),
(c) the balance of other funds generated pursuant to Article 5 (2) may be transferred by the undertaking to continue to use those funds or to make a profit not distributed, provided that it decides to finance the expenditure borne by them as the other use of profits; for fluctuations in the financial management at the end of 1990, uncovered by the resources referred to in the last sentence of Article 10 (3) (b), use the balance of those funds to settle the fluctuations in the financial management;
(d) the balance of the reserve fund shall be transferred to continue to be used as a long-term own financial resource in accordance with Article 3 (1); however, before such transfer, the balance of the reserve fund shall be settled by drawing on the remuneration of the fund above its generated resources within the meaning of Article 10 (3) (b) or, where appropriate, by fluctuations in the financial management at the end of 1990 pursuant to Article 11 (1).
Financial management fluctuations at the end of 1990
(1) The financial management fluctuations at the end of 1990 (from previous years and current years) will be settled by the undertaking by 1 January 1991 at the latest; if the retained earnings from the current year or previous years or the balance of the funds referred to in Article 10 (3) (c) are not sufficient to settle them, the holding shall settle them with the balance of the reserve.
(2) If the resources referred to in paragraph 1 are not sufficient to meet the fluctuations in financial management and those fluctuations are not covered by a consolidation loan or temporary financial assistance from the relevant budget, the undertaking shall transfer the outstanding and uncovered amount of the fluctuations in financial management to the Common Equity (reduced by Common Equity).
Specific provisions
For enterprises with a number of up to 100 employees, the profit is the difference between cash income and expenditure, less depreciation of basic funds. In doing so, the revenue and expenditure of the funds referred to in paragraphs 6 to 8 and the cash expenditure paid as the other use of profits shall not be included in the cash income and expenditure. However, the Founder may provide that such undertakings will proceed in their financial management in accordance with Sections 1 to 11.
TRANSITIONAL AND FINAL PROVISIONS
Transitional provisions
All central authorities that have set up ministerial funds shall abolish them by transferring their balances to the relevant state budget, or to newly established state funds with the approval of the Government of the Czech and Slovak Federal Republic, or the Government of the Czech Republic or the Government of the Slovak Republic in the context of settlement of the financial relations of central authorities to state budgets for 1990.
(1) Foreign traders (5) will continue to operate under Sections 1 to 11 and 16 of this Regulation.
(2) Equity companies for foreign trade, established under the special regulation (6) and the association for foreign trade, (7) which continue to operate in their financial management under Government Regulation No. 208 / 1989 Coll., on the financial management of state enterprises and certain other socialist organisations, shall apply Sections 10 and 11 of this Regulation.
(3) Equity companies for foreign trade will increase capital by common equity created pursuant to Sections 10 and 11.
(4) The Association for Foreign Trade will increase by the joint capital created under Sections 10 and 11 of the statutory fund.
The undertakings and other organisations referred to in § 14 shall carry out the financial settlement of 1990 in accordance with Government Regulations No. 208 / 1989 Coll. and No. 127 / 1988 Coll., before the procedure laid down in Sections 10 and 11 of this Regulation; however, Article 13 (5) of the Government Regulation No. 208 / 1989 Coll., on the completion of the turnover fund at the end of the year shall not apply.
(1) If the company is wound up and its assets are transferred to a public limited-liability company, or if another form of business is applied, the firm shall draw up a balance sheet on the last day of the preceding month and make an adjustment to the necessary extent in accordance with Sections 10 and 11.
(2) An undertaking with more than 100 employees but up to 200 employees authorised by the competent Ministry of Finance by an exemption from § 18 of Government Decree No. 208 / 1989 Coll., may, until the period referred to in paragraph 1, proceed with its financial management under § 12 of this Regulation.
Final provisions
Undertakings which are still engaged in their financial management under the Government of the Czechoslovak Socialist Republic No 127 / 1988 Coll., on the financial management of state enterprises, single agricultural cooperatives and joint undertakings of the agricultural food complex shall not be subject to Government Regulation No. 127 / 1988 Coll.
The decree of the Government of the Czechoslovak Socialist Republic No. 208 / 1989 Coll., on the financial management of state enterprises and some other socialist organisations is hereby repealed.
This Regulation shall enter into force on 1 January 1991.
CHF
1) Act No. 156 / 1989 Coll., on contributions to the state budget.
2) Decree of the Prime Minister No 91 / 1958 Coll., which publishes the measure of the Institute on the organisation and implementation of occupational sickness insurance, as amended.
3) Decree of the Federal Ministry of Finance, Ministry of Finance, Prices and Wages of the Czech Socialist Republic and Ministry of Finance, Prices and Wages of the Slovak Socialist Republic No. 210 / 1989 Coll., on the Fund of Cultural and Social Needs.
4) § 19 (3) of Act No. 156 / 1989 Coll.
5) Act No. 42 / 1980 Coll., on Economic Relations with Foreign Affairs, as amended by Act No. 102 / 1988 Coll., and Act No. 113 / 1990 Coll.
6) Act No. 243 / 1949 Coll., on Equity Companies.
7) International Trade Act No. 101 / 1963 Coll.
Sign in for notes, favorites and notifications
Regulation Information
| Citation | Decree of the Government of the Czech and Slovak Federal Republic No. 577 / 1990 Coll., on the Financial Management of State Enterprises |
|---|---|
| Regulation Type | - |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 29.12.1990 |
|---|---|
| Effective from | 01.01.1991 |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
Comments 0