Principles No 64 / 1966 Coll.
Principles for regulating economic and financial relations within production units, approved by Government Resolution of 15 July 1966 No 242
Valid
64
PRINCIPLES FOR THE REGULATION OF ECONOMIC AND FINANCIAL RELATIONS
within production and economic units
Approved by the Government Resolution of 15 July 1966 No 242
In the context of the accelerated implementation of the new management system, there will be changes in relations within the production units. The most significant changes will be made in economic and financial relations between the sectoral directorates, of the one part, and undertakings, of the other part. The rational activity of the entire production unit depends on the correct resolution of these relationships.
Position of undertakings and branches in the production unit
1. An undertaking is also a fundamental part of the proceedings under new conditions. It provides general tasks for specific activities. It must therefore be a separate economic organism that bears direct responsibility for economic activity. To do this, they must have an adequate degree of competence, responsibility and interest. Conditions must be created for businesses to develop socialist entrepreneurship.
2. The most important element of governance in the sector is the branch directorate responsible for the long-term and effective development of the whole of the VHJ, coordinating the work of subordinate enterprises and organisations and promoting the interests of the VHJ as a whole. Its management activities focus mainly on conceptual issues and the long-term development of the VHJ. The Directorate-General for Trade must create conditions for the application of the autonomy of undertakings and intervene in part, operational issues, only where strictly necessary.
3. Exceptionally, it is possible to focus more authority on the branch headquarters in those of the VHJ, where the economic efficiency of centralisation of management can be significantly applied.
4. These management relationships will be dealt with in a differentiated manner in the VHJ Statute according to objective aspects given by the nature of the production technical base and the economic situation.
5. For the adjustment of financial relations, uniform principles apply to all VHJ and businesses. According to these principles, the financial relations of the branch directorates and undertakings in the VHJ trust-type and the relationship of the branch directorates and undertakings in the VHJ group-type are regulated. Solving relationships within branch and trust enterprises is the responsibility of businesses. In doing so, they ensure effective autonomy and objective material interest and responsibility of subordinate plants, in particular those with a relatively closed production and sales cycle.
Financial obligations of undertakings towards the State, national committees, the State Bank and financial relations with the branch directorates
1. Undertakings shall:
a) transfer to the state budget according to the government's resolution
- a uniform gross income or profit payment,
- the contribution from the basic resources,
- withdrawal from stocks,
- stabilisation charge;
(b) pay gross income (profit) to the national committees;
(c) to repay loans and interest to the State Bank on the agreed terms;
(d) to make repayments of the residual price of the basic funds;
(e) to pay, in accordance with the decision of the KNV, a premium on the stabilising levy, environmental degradation fees, etc., in accordance with the rules to be issued.
2. On completion of these obligations, undertakings shall:
(a) carry out the branch directorates
- resources to cover the costs of its own activities,
- additional contributions to the necessary redistribution of funds within the VHJ and in the sectors, where provided, also to redistribution between the VHJ,
- contributions to centralised VHJ resources;
(b) use funds to meet their needs in accordance with the applicable rules.
Reimbursement of the costs of the activities of the branch directorates
1. Undertakings shall make contributions to the Directorate-General for Trade to cover the costs in kind and in person associated with its management activities. The remuneration of services provided by the economic centres of the branch office is normally invoiced to undertakings (e.g. machine counting stations or calculation centres).
2. The resources to cover the costs in kind and in person of the branches must be separately recorded and must not be mixed with other resources centralised with the branches for the common needs of the whole VHJ.
3. The amount of the contribution shall be determined by the Directorate-General for Enterprise according to objective criteria, the most appropriate setting of a fixed percentage (promile) from a pre-determined base, so that both the material interest and the amount of the costs in kind of the Directorate-General is linked to the results of business management.
These contributions shall be borne by the undertakings on their costs. *)
Redistribution of funds in VHJ
1. Unified levies and other economic instruments constitute a mutually linked system, aimed at objective influence on the work of enterprises and an efficient combination of factors of production. It is therefore essential that the branch directorates ensure that they operate directly on the undertakings.
2. The current economic situation, but also the nature of some VHJ, will not allow these principles to be applied without exceptions in all cases. The framework management conditions allow the branch directorates to carry out the necessary redistribution of funds between undertakings within the VHJ according to long-term principles. This redistribution must not be, except in government-approved exceptions, the nature of changes in rates and thus changes in the efficiency criteria, but in addition to the contributions and subsidies generally expressed in absolute amounts.
3. When redistributing funds, the following procedure shall be maintained:
(a) the branch directorates ensure that the assumptions are made that individual enterprises (and thus the VHJ as a whole) can meet the uniform contributions to the State budget as well as other financial obligations. To this end, they have the right to grant exceptional subsidies to undertakings with a lower economic level without requirements for the State budget. The principles of gradual restriction of redistribution may be laid down for the branch directorates;
(b) in most of the VHJ, the principle of the speedy elimination of subsidies granted to undertakings by sectoral directorates should be applied. It is therefore effective
- to provide exceptional subsidies to lagging behind undertakings only if the situation cannot be resolved otherwise, in particular by rationalisation measures, change in the production programme, liquidation of inefficient establishments, etc.;
- as a general rule, to set grants for a transitional period and to take account of their decline year by year,
- provide that undertakings requesting subsidies (discounts) are required to propose measures to gradually liquidate their financial dependence on subsidies or discounts,
- be based on the principle that undertakings are not entitled to the subsidy and may be reduced or cancelled if the production programme of undertakings proves to be capable of being effectively secured differently, or that the undertaking fails to comply with the agreed rationalisation measures, thereby increasing wages in an unwanted manner, etc.,
- to provide additional contributions to progressive undertakings in a binding and long-term manner after consultation so as to avoid a flat-rate drain on the funds of well-employed enterprises and thereby undermine their initiative.
4. The temporary imposition of additional levies, in particular during the period of implementation of the principles, cannot be seen as a discriminatory measure against progressive undertakings, because their "progressivity" as well as "backwardness" of other undertakings is largely due to past developments and the allocation of investments from the state budget. This effect is respected by the price conversion carried out for the production industries and product groups, but not for individual undertakings within the VHJ.
5. Some VHJ will have to count on the redistribution of funds between undertakings for a longer period, particularly in the fields with long-term tied funds, or where there are other long-term objective reasons for a different level of profitability. In these cases, too, the principles set out in the earlier paragraphs must be respected as far as possible, with redistribution being a long-term system.
6. The overall programme for the liquidation of additional levies (surcharges) and subsidies (discounts) in all cases where the conditions are not objectively defined and long-term operating conditions, shall be determined by the branch, after consultation with undertakings involved in the redistribution of funds.
Centralisation of funds at branch directorates
1. In addition to centralising the means for the necessary redistribution as provided for in Article 4, the branch directorate may centralise additional resources to the extent necessary to create or supplement centralised VHJ resources. The contributions of undertakings to these centralised funds should also be determined according to objective criteria.
2. In particular, centralised funds should be used in return (interest-free or interest-free), as this form does not undermine the objective effect of religious monetary relations and efficiency criteria. In this form, temporary assistance to businesses in the absence of wage funds should also be addressed. The non-refundable use of centralised funds should be limited to those cases where, in a higher social or sectoral interest, it is necessary to derogate from corporate efficiency criteria.
3. Centralised devices may be used for example:
(a) technical development (where there is a significant degree of risk or where it is not appropriate to invoice certain tasks for undertakings);
(b) the construction of certain facilities or buildings serving the needs of all enterprises (e.g. research and project institutes);
(c) education allowances for apprenticeships;
(d) professional forms of material interest;
(e) to settle the economic consequences of binding tasks.
4. Centralised appropriations shall be broken down into individual funds according to the relevant rules.
5. Funding for centralised VHJ resources will be paid by enterprises in the following forms:
(a) a fixed contribution from the applicable profit or gross income (according to the uniform criteria applicable to all enterprises in the sector in order to avoid draining the results of their management and not to undermine their initiative);
(b) the contribution of part of the depreciation in the case of plants intended for disposal (however, this appropriation may only be used for investment construction).
Voluntary concentration of investment funding
The branch directorates that carry the investment policy concepts may organise the economic association of enterprises in the construction of a joint venture or loans between enterprises.
Management and financing relations for investment construction
1. In the financing of investment construction, undertakings carry material responsibility, regardless of the extent to which their decisions have been influenced by the branch directorates or centres. If the investment is inefficient but necessary from a wider than business perspective, this influence must be economically settled either at VHJ level or at the centre.
2. Central authorities and, in particular, branch directorates will have a significant influence on investment construction. In addition to the general definition of economic instruments and rules applicable to investment construction, central authorities will influence the selection process to comply with the basic demand for economic proportions, to guide investment construction in critical fields and to ensure social interests, in particular from territorial considerations. This concept also affects, to a certain extent, the competence and responsibility of the branches in relation to undertakings.
3. The influence on investment decision-making will be exercised by the branch directorates as follows:
and develop long-term development concepts of the VHJ based on an analysis of the development of economic conditions of production, technical development, etc.;
(b) draw up an opinion on investments authorised by the Government;
(c) in the selection procedure, the proposals of undertakings shall be assessed on the basis of how they correspond to the development concept of each production sector, the calculations of the efficiency of investment construction, including the economic context resulting from market analysis, etc. In particular, they shall ensure that the means are not misdirected. On the basis of these analyses, certain actions recommend to the Bank for further management in which they will participate;
(d) leave undertakings sufficient power to decide on investment construction financed by the free funds of undertakings; larger investments affecting the development of the VHJ must be discussed with the industry directorates.
4. The principle of responsibility for investment construction also applies to newly built enterprises. These undertakings generally rely on a loan on a proposal from the branch. The liabilities are then assumed by the newly built enterprise. Cases where new businesses or establishments are built directly from the branch's resources should be quite exceptional, for example in the VHJ, which make full differentiation of economic instruments.
*) These funds will be subject to contributions from the Directorate-General for the Industry.
Sign in for notes, favorites and notifications
Regulation Information
| Citation | Principles No 64 / 1966 Coll., for the regulation of economic and financial relations within production units, approved by the Government Resolution of 15 July 1966 No 242 |
|---|---|
| Regulation Type | - |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 05.08.1966 |
|---|---|
| Effective from | - |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
Comments 0