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VIETNAM State budget reached $28 billion in 2010

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VIETNAM State budget reached $28 billion in 2010

Post  1alaskan on Fri Jul 20, 2012 3:57 pm

State budget reached $28 billion in 2010

HA NOI — Total State budget revenue in 2010 reached VND588.4 trillion (US$28 billion) while total expenditure hit VND648.8 trillion ($30.89 billion) due to increased spending for development investment, according to the 2010 audit report released on Wednesday by the State Audit of Viet Nam (SAV).

Deputy State Auditor General Le Minh Khai appreciated efforts made by relevant authorities to collect the State budget, with the 2010 budget revenue 27.5 per cent higher than estimate.

Despite signs of improvement, the State Audit recommended that more than VND21.76 trillion ($1 billion) would be handled in total, with an additional sum of more than VND3.2 trillion ($152 million) for the revenue and a reduction of VND2.19 trillion ($104 million) in expenses.

State auditors also found that many State-owned enterprises had made inadequate contributions to the State budget, and instructed them to pay an additional VND545 billion ($25.95 million).

According to the report, 19 out of 21 State-owned groups and corporations made a profit in 2010, however, the financial management and investment of the businesses remained restricted.

Vinacomin made a pre-tax profit of VND9.12 trillion ($434.28 million) in 2010 and a return on equity of more than 34 per cent. The pre-tax profits of the Housing and Urban Development Corp and the Viet Nam Cement Corp were VND2 trillion ($95.23 million) and VND1 trillion ($47.6 million), respectively.

Two corporations, which suffered a loss in 2010, were Electricity of Viet Nam (VND8.4 trillion) and the Viet Nam Waterway Construction Corp (VND73.5 billion).

Dao Van Dung, director of the SAV's General Affairs Department, said that total investment capital of the 21 groups and corporations in 2010 reached VND37.73 trillion ($1.79 billion), equivalent to 6.46 per cent of their total assets. The investment ratio was safe, however, most of the groups and corporations invested in non-core business. According to the audit, some corporations poured more money into the non-core businesses than their registered capital, while the common ratio stood at 4-12 per cent for those operating in the cement, shipping, power, and coal industries.

The investment into non-core business, especially in finance, banking, securities, insurance and real estate, was ineffective. Electricity of Viet Nam, for example, made a loss of roughly VND1 trillion ($47.6 million) due to its ineffective investment in telecommunications. The loss of the Sai Gon Beer, Alcohol and Beverage Corp was roughly VND359 billion ($17 million) due to its investment in securities.
The Viet Nam National Coal and Mineral Industries Group also poured VND1.82 trillion ($86.6 million) into securities and real estate, however, its profit on investment ratio was low at only 7.94 per cent.

The report said that 11 out of 21 groups and corporations mainly depended on credit, which made it impossible to ensure the safety level. The Truong Son Construction Corp, for example, reported its debt on equity ratio at 9.19 times at the end of 2010. Figures from the Infrastructure Development and Construction Corp, Electricity of Viet Nam and the Housing and Urban Development Corp fell between 3.83 and 4.79. In principle, the debt on equity ratio of State-owned enterprises was alleged to be dangerous, exceeding the acceptable level by three times pursuant to Government Decree No 09 dated February 5, 2009.

As for finance and banking, the State Audit reported that the sector had achieved high profits and growth in 2010. Vietinbank, for example, had a surge of 25.24 per cent in deposit mobilisation and its profit on investment capital ratio was 22.21 per cent. The ratios at Vietcombank were respectively 14.94 per cent and 29.53 per cent.

However, the auditors found that many banks failed to meet the capital adequacy ratio (CAR) of 8 per cent regulated by the State Bank of Viet Nam. For instance, Vietcombank's CAR in January 2010 was 6.8 per cent and the ratios in February and March were 6.5 per cent and 7.6 per cent.

The auditors also reported that the Debt and Asset Trading Corporation in 2010 did not focus on its main role of trading in debt and investing to restructure enterprises. The ineffective use of investment capital had left the corporation at risk of losing roughly VND70 billion ($3.33 million). — VNS


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