EN Official Journal of the European Union C 379/1

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE COURT OF AUDITORS

Annual accounts of the European Development Fund 2015

(2016/C 379/01)

CONTENTS

CERTIFICATION OF THE ACCOUNTS 2

IMPLEMENTING AND ACCOUNTING FOR THE EDF RESOURCES 3

FINANCIAL STATEMENTS AND EXPLANATORY NOTES — FUNDS MANAGED BY THE EUROPEAN COMMISSION 6

FINANCIAL STATEMENTS OF THE EDF 7

NOTES TO THE FINANCIAL STATEMENTS OF THE EDF 15

FINANCIAL STATEMENTS OF THE BÊKOU TRUST FUND 39

CERTIFICATION OF THE ACCOUNTS 40

BACKGROUND INFORMATION ON THE BÊKOU EU TRUST FUND 41

NOTES TO THE FINANCIAL STATEMENTS OF THE BÊKOU TRUST FUND 43

CONSOLIDATED FINANCIAL STATEMENTS OF THE EDF AND THE BÊKOU TRUST FUND 47

EDF REPORT ON FINANCIAL IMPLEMENTATION 50

FINANCIAL STATEMENTS AND EXPLANATORY NOTES — FUNDS MANAGED BY THE EUROPEAN INVESTMENT BANK 78

CERTIFICATION OF THE ACCOUNTS

The annual accounts of the European Development Fund for the year 2015 have been prepared in accordance with Title IX of the Financial Regulation of the 11th European Development Fund and with the accounting principles, rules and methods set out in annex to the financial statements.

I acknowledge my responsibility for the preparation and presentation of the annual accounts of the European Development Fund in accordance with Article 20 of the Financial Regulation of the 11th European Development Fund.

I have obtained from the authorising officers and from the EIB, who guarantee its reliability, all the information necessary for the production of the accounts that show the European Development Fund's assets and liabilities and the budgetary implementation.

I hereby certify that based on this information, and on such checks as I deemed necessary to sign off the accounts, I have a reasonable assurance that the accounts present a true and fair view of the financial position of the European Development Fund in all material aspects.

[signed] Manfred KRAFF Accounting Officer 12 July 2016

IMPLEMENTING AND ACCOUNTING FOR THE EDF RESOURCES

1. BACKGROUND

The European Union (hereinafter referred to as the EU) has cooperative relations with a large number of developing countries. The main objective is to promote economic, social and environmental development, with the primary aim of reducing and eradicating poverty in the long-term, by providing beneficiary countries with development aid and technical assistance. To achieve this, the EU draws up, jointly with the partner countries, cooperation strategies and mobilises the financial resources to implement them. These EU resources allocated to development cooperation come from three sources:

— The EU budget;

— The European Development Fund;

— The European Investment Bank.

The European Development Fund (hereinafter referred to as the EDF) is the main instrument for providing EU aid for development cooperation to the African, Caribbean and Pacific (hereinafter referred to as the ACP) States and Overseas Countries and Territories (hereinafter referred to as the OCTs).

The EDF is not funded by the EU budget. It is established by an internal agreement of the Representatives of the Member States, sitting within the Council, and managed by a specific committee. The European Commission (hereinafter referred to as the Commission) is responsible for the financial implementation of the operations carried out with EDF resources. The European Investment Bank (hereinafter referred to as the EIB) manages the Investment Facility.

During the period 2014-2020, the geographic aid granted to ACP States and OCTs will continue to be mainly funded by the EDF. Each EDF is usually concluded for a period of around five years and is governed by its own Financial Regulation which requires the preparation of financial statements for each individual EDF. Accordingly, financial statements are prepared separately for each EDF in respect of the part that is managed by the Commission. These financial statements are also presented in an aggregated way so as to provide a global view of the financial situation of the resources for which the Commission is responsible.

The Internal Agreement establishing the 11th EDF was signed by the participating Member States, meeting within the Council, in June 2013 (1). It came into force on 1 March 2015. In order to assure continuity between the end of the 10th EDF and the entry into force of the 11th EDF, the Commission proposed transitional measures, known as the Bridging Facility (BF) (2). The BF is presented under the 11th EDF.

At the same time the 10th EDF Financial Regulation (3) was amended and the new Financial Regulation applicable to the transition period was adopted (4). They entered into force on 30 May 2014. On 2 March 2015 the Council adopted the 11th EDF Financial Regulation (5) and the Implementation Rules (6). They entered into force on 6 March 2015.

Within the framework of the ACP-EU Partnership Agreement, the Investment Facility was established. This Investment Facility is managed by the EIB and is used to support private sector development in the ACP States by financing essentially — but not exclusively — private investments. The Facility is designed as a renewable fund, so that loan repayments can be reinvested in other operations, thus resulting in a self-renewing and financially independent facility. As the Investment Facility is not managed by the Commission, it is not consolidated in the first part of the annual accounts — the financial statements of the EDF and the related report on financial implementation. The financial statements of the Investment Facility are included as a separate part of the annual accounts (part II) to provide a full picture of the development aid of the EDF (7).

2. HOW IS THE EDF FUNDED?

The European Council of 2 December 2013 adopted the Multi-annual Financial Framework for 2014-2020. In this context, it was decided that geographical cooperation with the ACP States would not be integrated into the EU budget (budgetised), but would continue to be funded through the existing inter-governmental EDF.

The EU budget is annual and according to the budgetary principle of annuality, expenditure and revenue are planned and authorised for one year. Unlike the EU, the EDF is a fund operating on the basis of multiannuality. Each EDF establishes an overall fund to implement development cooperation during a period of usually five years. As resources are allocated on a multiannual basis, the allocated funds may be used over the period of the EDF. The lack of budget annuality is highlighted in the budgetary reporting, where the budgetary implementation of the EDFs is measured against the total funds.

The EDF resources are ‘ad hoc’ contributions from the EU Member States. Approximately every five years, Member State representatives meet at intergovernmental level to decide on an overall amount that will be allocated to the fund and to oversee its implementation. The Commission then manages the fund in accordance with the Union policy on development cooperation. Since Member States have their own development and aid policies in parallell to the Union policy, the Member States must coordinate their policies with the EU to ensure they are complementary.

In addition to the above mentioned contributions, it is also possible for Member States to enter into co-financing arrangements or to make voluntary financial contributions to the EDF.

3. YEAR-END REPORTING

3.1. ANNUAL ACCOUNTS

It is the Accounting Officer's responsibility to prepare the annual accounts and ensure that they present a true and fair view of the financial position of the EDF.

The annual accounts are presented as follows:

Part I: Funds managed by the Commission

(i) Financial statements of the EDF

(ii) Report on financial implementation of the EDF

Part II: Funds managed by the EIB

(i) Financial statements of the Investment Facility

In addition, since 2014 when a trust fund has been created under the EDF (see 3.2 below), its accounts, as well as the consolidated (EDF and trust fund) accounts are presented below.

The annual accounts are adopted by the Commission by 31 July of the subsequent year and presented to the European Parliament and to the Council for discharge.

3.2. BÊKOU TRUST FUND

In accordance with Article 187(1) of the Financial Regulation applicable to the general budget of the Union (EU FR) and Article 42 of the Financial Regulation applicable to the transition period, the Commission is allowed to create Union Trust Funds for external actions under an agreement concluded with other donors. These trust funds may be created for emergency, post-emergency and thematic actions. In accordance with Article 187(6) of the EU FR, the accounting officer of the Union Trust Fund shall be the Accounting Officer of the Commission.

The first multi-donor EU Trust Fund called Bêkou, was established on 15 July 2014, by the EU and Germany, France and the Netherlands, with the aim to promote the stabilisation and reconstruction of the Central African Republic. The maximum duration of the Bêkou Trust fund is 60 months.

As the Bêkou Trust fund was established under the EDF, its annual accounts are consolidated with the EDF accounts.

4. AUDIT AND DISCHARGE

4.1. AUDIT

The EDF annual accounts and resource management are overseen by its external auditor, the European Court of Auditors (hereinafter referred to as the ECA), which draws up an annual report for the European Parliament and the Council.

4.2. DISCHARGE

The final control is the discharge of the financial implementation of the EDF resources for a given financial year. The European Parliament is the discharge authority of the EDF. This means that following the audit and finalisation of the annual accounts it falls to the Council to recommend and then to the European Parliament to decide whether to grant discharge to the Commission for the financial implementation of the EDF resources for a given financial year. This decision is based on a review of the accounts and the annual report of the ECA (which includes an official statement of assurance) and replies of the Commission, and also following questions and further information requests to the Commission.

FINANCIAL STATEMENTS AND EXPLANATORY NOTES — FUNDS MANAGED BY THE EUROPEAN COMMISSION (1)

CONTENTS

FINANCIAL STATEMENTS AND EXPLANATORY NOTES — FUNDS MANAGED BY THE EUROPEAN COMMISSION 6

FINANCIAL STATEMENTS OF THE EDF 7

EDF BALANCE SHEET 7

EDF STATEMENT OF FINANCIAL PERFORMANCE 8

EDF CASHFLOW STATEMENT 9

EDF STATEMENT OF CHANGES IN NET ASSETS 10

BALANCE SHEET BY EDF 11

STATEMENT OF FINANCIAL PERFORMANCE BY EDF 12

STATEMENT OF CHANGES IN NET ASSETS BY EDF 13

NOTES TO THE FINANCIAL STATEMENTS OF THE EDF 15

FINANCIAL STATEMENTS OF THE BÊKOU TRUST FUND 39

CERTIFICATION OF THE ACCOUNTS 40

BACKGROUND INFORMATION ON THE BÊKOU EU TRUST FUND 41

BÊKOU TRUST FUND BALANCE SHEET 41

BÊKOU TRUST FUND STATEMENT OF FINANCIAL PERFORMANCE 42

BÊKOU TRUST FUND CASHFLOW STATEMENT 42

BÊKOU TRUST FUND STATEMENT OF CHANGES IN NET ASSETS 42

NOTES TO THE FINANCIAL STATEMENTS OF THE BÊKOU TRUST FUND 43

CONSOLIDATED FINANCIAL STATEMENTS OF THE EDF AND THE BÊKOU TRUST FUND 47

CONSOLIDATED BALANCE SHEET 47

CONSOLIDATED STATEMENT OF FINANCIAL PERFORMANCE 48

CONSOLIDATED CASH FLOW STATEMENT 48

CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS 49

EDF REPORT ON FINANCIAL IMPLEMENTATION 50

FINANCIAL STATEMENTS OF THE EDF (8)

EDF BALANCE SHEET

EUR millions Note 31.12.2015 31.12.2014 NON-CURRENT ASSETS Pre-financing 2.1 516 472 Trust Fund contributions 2.2 34 39 550 511 CURRENT ASSETS Pre-financing 2.3 1 145 1 403 Receivables 2.4 171 84 Cash and cash equivalents 2.6 504 391 1 820 1 879 TOTAL ASSETS 2 370 2 389 NON-CURRENT LIABILITIES Provisions 2.7 (4) — Payables 2.8 (10) (34) (14) (34) CURRENT LIABILITIES Payables 2.9 (1 376 ) (1 423 ) (1 376 ) (1 423 ) TOTAL LIABILITIES (1 390 ) (1 457 ) NET ASSETS 980 932 FUNDS & RESERVES Called fund capital — active EDFs 2.10 38 873 35 673 Called fund capital from closed EDFs carried forward 2.11 2 252 2 252 Economic result carried forward from previous years (36 994 ) (33 468 ) Economic result of the year (3 152 ) (3 526 ) NET ASSETS 980 932





EDF STATEMENT OF FINANCIAL PERFORMANCE

EUR millions Note 2015 2014 OPERATING REVENUE 3.2 132 132 OPERATING EXPENSES Operating expenses 3.3 (3 179 ) (3 650 ) Administrative expenses 3.4 (113) (22) (3 291 ) (3 671 ) SURPLUS/(DEFICIT) FROM OPERATING ACTIVITIES (3 160 ) (3 539 ) Financial revenue 3.5 8 13 Financial charges (0) (0) SURPLUS/(DEFICIT) FROM FINANCIAL ACTIVITIES 8 13 ECONOMIC RESULT OF THE YEAR (3 152 ) (3 526 )





EDF CASHFLOW STATEMENT

EUR millions Note 2015 2014 Economic result of the year (3 152 ) (3 526 ) OPERATING ACTIVITIES Ordinary contributions from Member States 3 232 3 068 (Reversal of) impairment losses on receivables 1 14 (Increase)/decrease in pre-financing 214 (165) (Increase)/decrease in Trust Fund contributions 5 (39) (Increase)/decrease in current receivables (*) (88) (15) Increase/(decrease) in non-current liabilities (20) 9 Increase/(decrease) in current liabilities (**) (211) 152 Increase/(decrease) in accrued charges and deferred income 132 134 NET CASHFLOW 113 (368) Net increase/(decrease) in cash and cash equivalents 113 (368) Cash and cash equivalents at the beginning of the year 2.6 391 759 Cash and cash equivalents at year-end 2.6 504 391





EDF STATEMENT OF CHANGES IN NET ASSETS

EUR millions Fund capital — active EDFs (A) Uncalled funds — active EDFs (B) Called fund capital — active EDFs (C) = (A)-(B) Cumulative Reserves (D) Called fund capital from closed EDFs carried forward (E) Total Net Assets (C)+(D)+(E) BALANCE AS AT 31.12.2013 45 691 13 162 32 529 (33 468 ) 2 252 1 313 Capital increase — ordinary contributions — (3 144 ) 3 144 — — 3 144 Economic result of the year — — — (3 526 ) — (3 526 ) BALANCE AS AT 31.12.2014 45 691 10 018 35 673 (36 994 ) 2 252 932 Capital increase — contributions (4 795 ) 4 795 — — 4 795 Capital decrease — funds committed under the Bridging Facility (1 595 ) (1 595 ) (1 595 ) Recognition of the 11th EDF capital 29 367 29 367 — — Economic result of the year — — — (3 152 ) — (3 152 ) BALANCE AS AT 31.12.2015 73 464 34 590 38 873 (40 146 ) 2 252 980





BALANCE SHEET BY EDF

EUR millions 31.12.2015 31.12.2014 Note Eighth EDF Ninth EDF 10th EDF 11th EDF Eighth EDF Ninth EDF 10th EDF 11th EDF NON-CURRENT ASSETS Pre-financing 2.1 — 63 368 84 — 17 411 44 Trust Fund contributions 2.2 — — — 34 39 — 63 368 118 — 17 411 83 CURRENT ASSETS Pre-financing 2.3 3 67 879 195 5 142 1 178 77 Receivables 2.4 1 65 103 2 3 66 15 0 Liaison accounts 2.5 214 657 1 190 — 216 810 — 607 Cash and cash equivalents 2.6 — — — 504 — — — 391 218 790 2 172 701 224 1 018 1 193 1 076 TOTAL ASSETS 218 853 2 541 819 224 1 035 1 604 1 159 NON-CURRENT LIABILITIES Provisions 2.7 — — — (4) — — — — Payables 2.8 — — (10) — — — (34) — — — (10) (4) — — (34) — CURRENT LIABILITIES Payables 2.9 (3) (128) (1 174 ) (71) (10) (175) (1 195 ) (43) Liaison accounts 2.5 — — — (2 062 ) — — (1 633 ) — (3) (128) (1 174 ) (2 132 ) (10) (175) (2 828 ) (43) TOTAL LIABILITIES (3) (128) (1 184 ) (2 136 ) (10) (175) (2 862 ) (43) NET ASSETS 214 726 1 357 (1 317 ) 214 860 (1 258 ) 1 116 FUNDS & RESERVES Called fund capital — active EDFs 2.10 12 164 10 973 15 737 — 12 840 11 699 11 134 — Called fund capital from closed EDFs carried forward 2.11 627 1 625 — — 627 1 625 — — Called fund capital transfers between active EDFs 2.12 (2 476 ) 2 376 35 65 (3 147 ) 1 758 (209) 1 597 Economic result carried forward from previous years (10 107 ) (14 223 ) (12 183 ) (482) (10 114 ) (13 988 ) (9 356 ) (10) Economic result of the year 6 (26) (2 232 ) (901) 8 (235) (2 828 ) (472) 214 726 1 357 (1 317 ) 214 860 (1 258 ) 1 116 NET ASSETS 214 726 1 357 (1 317 ) 214 860 (1 258 ) 1 116





STATEMENT OF FINANCIAL PERFORMANCE BY EDF

EUR millions 2015 2014 Note Eighth EDF Ninth EDF 10th EDF 11th EDF Eighth EDF Ninth EDF 10th EDF 11th EDF OPERATING REVENUE 3.2 4 24 99 5 9 43 79 1 OPERATING EXPENSES Operating expenses 3.3 2 (56) (2 297 ) (828) (1) (293) (2 881 ) (475) Administrative expenses 3.4 (0) — (34) (79) — 0 (22) — 2 (56) (2 331 ) (907) (1) (293) (2 903 ) (475) SURPLUS/(DEFICIT) FROM OPERATING ACTIVITIES 6 (32) (2 232 ) (902) 8 (249) (2 824 ) (474) Financial revenue 3.5 (0) 6 0 2 0 15 (3) 2 Financial charges — — 0 (0) — — (0) — SURPLUS/(DEFICIT) FROM FINANCIAL ACTIVITIES (0) 6 1 2 0 15 (4) 2 ECONOMIC RESULT OF THE YEAR 6 (26) (2 232 ) (901) 8 (235) (2 828 ) (472)





STATEMENT OF CHANGES IN NET ASSETS BY EDF

EUR millions Eighth EDF Fund capital — active EDFs (A) Uncalled funds — active EDFs (B) Called fund capital — active EDFs (C) = (A)-(B) Cumulative Reserves (D) Called fund capital from closed EDFs carried forward (E) Called fund capital transfers between active EDFs (F) Total Net Assets (C)+(D)+(E)+(F) BALANCE AS AT 31.12.2013 12 840 — 12 840 (10 114 ) 627 (3 083 ) 270 Transfers to/from the 10th EDF — (64) (64) Economic result of the year — 8 8 BALANCE AS AT 31.12.2014 12 840 — 12 840 (10 107 ) 627 (3 147 ) 214 Capital decrease — funds committed under the Bridging Facility (676) (676) (676) Transfers to/from the 10th EDF — (6) (6) Transfers to/from the 11th EDF — 676 676 Economic result of the year — 6 6 BALANCE AS AT 31.12.2015 12 164 12 164 (10 100 ) 627 (2 476 ) 214





EUR millions Ninth EDF Fund capital — active EDFs (A) Uncalled funds — active EDFs (B) Called fund capital — active EDFs (C) = (A)-(B) Cumulative Reserves (D) Called fund capital from closed EDFs carried forward (E) Called fund capital transfers between active EDFs (F) Total Net Assets (C)+(D)+(E)+(F)) BALANCE AS AT 31.12.2013 11 699 — 11 699 (13 988 ) 1 625 2 130 1 467 Transfers to/from the 10th EDF — (372) (372) Economic result of the year — (235) (235) BALANCE AS AT 31.12.2014 11 699 — 11 699 (14 223 ) 1 625 1 758 860 Capital decrease — funds committed under the Bridging Facility (727) (727) (727) Transfers to/from the 10th EDF — (109) (109) Transfers to/from the 11th EDF — 727 727 Economic result of the year — (26) (26) BALANCE AS AT 31.12.2015 10 973 10 973 (14 249 ) 1 625 2 376 726





EUR millions 10th EDF Fund capital — active EDFs (A) Uncalled funds — active EDFs (B) Called fund capital — active EDFs (C) = (A)-(B) Cumulative Reserves (D) Called fund capital from closed EDFs carried forward (E) Called fund capital transfers between active EDFs (F) Total Net Assets (C)+(D)+(E)+(F) BALANCE AS AT 31.12.2013 21 152 13 162 7 990 (9 365 ) — 952 (423) Capital increase — contributions — (3 144 ) 3 144 3 144 Transfers to/from the Eighth and Ninth EDF — (936) (936) Transfers to/from the 11th EDF (225) (225) Transfer of economic result carried forward — treasury — from the 10th EDF to the 11th EDF 10 10 Economic result of the year — (2 828 ) (2 828 ) BALANCE AS AT 31.12.2014 21 152 10 018 11 134 (12 183 ) — (209) (1 258 ) Capital increase — contributions (4 795 ) 4 795 4 795 Capital decrease — funds committed under the Bridging Facility (192) (192) (192) Transfers to/from the Eighth and Ninth EDF — 84 84 Transfers to/from the 11th EDF — 160 160 Economic result of the year — (2 232 ) (2 232 ) BALANCE AS AT 31.12.2015 20 960 5 223 15 737 (14 415 ) — 35 1 357





EUR millions 11th EDF Fund capital — active EDFs (A) Uncalled funds — active EDFs (B) Called fund capital — active EDFs (C) = (A)-(B) Cumulative Reserves (D) Called fund capital from closed EDFs carried forward (E) Called fund capital transfers between active EDFs (F) Total Net Assets (C)+(D)+(E)+(F) BALANCE AS AT 31.12.2013 — — — — — — Capital increase — ordinary contributions — — — — Transfers to/from the Eighth, Ninth and 10th EDF — — 1 597 1 597 Transfer of economic result carried forward — treasury — from the 10th EDF to the 11th EDF (10) (10) Economic result of the year — (472) (472) BALANCE AS AT 31.12.2014 — — — (482) 1 597 1 116 Recognition of the 11th EDF capital in line with the Internal Agreement 29 301 29 301 — — Transfers to/from the Eighth, Ninth and 10th EDF — (1 532 ) (1 532 ) Economic result of the year — (901) (901) BALANCE AS AT 31.12.2015 29 301 29 301 — (1 382 ) 65 (1 317 )

NOTES TO THE FINANCIAL STATEMENTS OF THE EDF

1. SIGNIFICANT ACCOUNTING POLICIES

1.1. LEGAL BASIS AND ACCOUNTING RULES

In accordance with Article 46 of the EDF Financial Regulation, the EDF financial statements are prepared on the basis of accrual-based accounting rules that are based on International Public Sector Accounting Standards (IPSAS). The accounting rules adopted by the Accounting Officer of the Commission are applied by all the Institutions and bodies of the EU in order to establish a uniform set of rules for accounting, valuation and presentation of the accounts with a view to harmonising the process for drawing up the financial statements and consolidation, as required by Article 152 of the EU Financial Regulation. These rules are also applied to the EDF while taking into account the specific nature of its activities.

1.2. ACCOUNTING PRINCIPLES

The overall considerations (or accounting principles) to be followed when preparing the financial statements are laid down in EU accounting rule 1 ‘Financial Statements’ (the same as in IPSAS 1): fair presentation, accrual basis, going concern, consistency of presentation, aggregation, offsetting and comparative information. The qualitative characteristics of financial reporting according to Article 144 of the EU Financial Regulation are relevance, reliability, understandability and comparability.

1.3. BASIS OF PREPARATION

1.3.1. Currency and basis for conversion

The annual accounts are presented in millions of euros, the euro being the EU's functional and reporting currency. Foreign currency transactions are translated into euros using the exchange rates prevailing at the dates of the transactions. Year-end balances of monetary assets and liabilities denominated in foreign currencies are converted into euros on the basis of the exchange rates applying on 31 December.

Euro exchange rates

Currency 31.12.2015 31.12.2014 Currency 31.12.2015 31.12.2014 BGN 1,9558 1,9558 LTL — 3,4528 CZK 27,0230 27,7350 PLN 4,2639 4,2732 DKK 7,4626 7,4453 RON 4,5240 4,4828 GBP 0,7340 0,7789 SEK 9,1895 9,3930 HRK 7,6380 7,6580 CHF 1,0835 1,2024 HUF 315,9800 315,5400 JPY 131,0700 145,2300 USD 1,0887 1,2141

1.3.2. Use of estimates

In accordance with IPSAS and generally accepted accounting principles, the financial statements necessarily include amounts based on estimates and assumptions by management based on the most reliable information available. Significant estimates include, but are not limited to; amounts for employee benefit liabilities, provisions, financial risk on inventories and accounts receivables, accrued income and charges, contingent assets and liabilities, and degree of impairment of intangible assets and property, plant and equipment. Actual results could differ from those estimates. Changes in estimates are reflected in the period in which they become known.

1.4. BALANCE SHEET

1.4.1 Intangible assets

Acquired computer software licences are stated at historical cost less accumulated amortisation and impairment losses. The assets are amortised on a straight-line basis over their estimated useful lives. The estimated useful lives of intangible assets depend on their specific economic lifetime or legal lifetime determined by an agreement. Internally developed intangible assets are capitalised when the relevant criteria of the EU accounting rules are met. The costs capitalisable include all directly attributable costs necessary to create, produce, and prepare the asset to be capable of operating in the manner intended by management. Costs associated with research activities, non-capitalisable development costs and maintenance costs are recognised as expenses as incurred.

1.4.2 Property, plant and equipment

All property, plant and equipment are stated at historical cost less accumulated depreciation and impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition or construction of the asset. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits or service potential associated with the item will flow to the entity and its cost can be measured reliably. Repairs and maintenance costs are charged to the statement of financial performance during the financial period in which they are incurred. Land and works of art are not depreciated as they are deemed to have an indefinite useful life. Assets under construction are not depreciated as these assets are not yet available for use. Depreciation on other assets is calculated using the straight-line method to allocate their cost to their residual values over their estimated useful lives, as follows:

Type of asset Straight line depreciation rate Buildings 4 % to 10 % Plant and equipment 10 % to 25 % Furniture and vehicles 10 % to 25 % Fixtures and fittings 10 % to 33 % Computer hardware 25 % to 33 % Other 10 % to 33 %

Gains or losses on disposals are determined by comparing proceeds less selling expenses with the carrying amount of the disposed asset and are included in the statement of financial performance.

Leases

Leases of tangible assets, where the entity has substantially all the risks and rewards of ownership, are classified as finance leases. Finance leases are capitalised at the lease’s commencement at the lower of the fair value of the leased asset and the present value of the minimum lease payments. The interest element of the finance lease payment is charged to expenditure over the period of the lease at a constant periodic rate in relation to the balance outstanding. The rental obligations, net of finance charges, are included as liabilities. The assets held under finance leases are depreciated over the shorter of the asset's useful life and the lease term.

Leases where the lessor retains a significant portion of the risks and rewards inherent to ownership are classified as operating leases. Payments made under operating leases are charged to the statement of financial performance on a straight-line basis over the period of the lease.

1.4.3 Impairment of non-financial assets

Assets that have an indefinite useful life are not subject to amortisation/depreciation and are tested annually for impairment. Assets that are subject to amortisation/depreciation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use.

Intangible assets and property, plant and equipment residual values and useful lives are reviewed, and adjusted if appropriate, at least once per year. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. If the reasons for impairments recognised in previous years no longer apply, the impairment losses are reversed accordingly.

1.4.4 Financial assets

The financial assets are classified in the following categories: financial assets at fair value through profit or loss; loans and receivables; held-to-maturity investments; and available for sale financial assets. The classification of the financial instruments is determined at initial recognition and re-evaluated at each balance sheet date.

(i) Financial assets at fair value through profit or loss

A financial asset is classified in this category if acquired principally for the purpose of selling in the short term or if so designated by the entity. Derivatives are also categorised in this category. Assets in this category are classified as current assets if they are expected to be realised within 12 months of the balance sheet date. During this financial year, the entity did not hold any investments in this category.

(ii) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the entity provides money, goods or services directly to a debtor with no intention of trading the receivable. They are included in non-current assets, except for maturities within 12 months of the balance sheet date.

(iii) Held-to-maturity investments

Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the entity has the positive intention and ability to hold to maturity. During this financial year, the entity did not hold any investments in this category.

(iv) Available for sale financial assets

Available for sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are classified as either current or non-current assets, depending on the time period in which the entity expects to dispose of them which is usually the remaining maturity at the balance sheet date.

1.4.5 Pre-financing amounts

Pre-financing is a payment intended to provide the beneficiary with a cash advance, i.e. a float. It may be split into a number of payments over a period defined in the particular contract, decision, agreement or the basic legal act. The float or advance is either used for the purpose for which it was provided during the period defined in the agreement or it is repaid. If the beneficiary does not incur eligible expenditures, he has the obligation to return the pre-financing advance to the entity. The amount of the pre-financing is reduced (wholly or partially) by the acceptance of eligible costs (which are recognised as expenses) and amounts returned.

At year-end, outstanding pre-financing amounts are measured at the amount(s) initially recognised on the balance sheet less amounts returned and eligible expenses, including estimated amounts where necessary, incurred during the period.

1.4.6 Receivables and recoverables

Receivables and recoverables are carried at original amount less write-down for impairment. A write-down for impairment is established when there is objective evidence that the entity will not be able to collect all amounts due according to the original terms of receivables. The amount of the write-down is the difference between the asset’s carrying amount and the recoverable amount. The amount of the write-down is recognised in the statement of financial performance.

1.4.7 Cash and cash equivalents

Cash and cash equivalents are financial instruments and classified as available for sale financial assets. They include cash at hand, deposits held at call or at short notice with banks, and other short-term highly liquid investments with original maturities of three months or less.

1.4.8 Provisions

Provisions are recognised when the entity has a present legal or constructive obligation towards third parties as a result of past events, it is more likely than not that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated. Provisions are not recognised for future operating losses. The amount of the provision is the best estimate of the expenditures expected to be required to settle the present obligation at the reporting date. Where the provision involves a large number of items, the obligation is estimated by weighting all possible outcomes by their associated probabilities (‘expected value’ method).

1.4.9 Payables

A significant amount of the payables of the entity are not related to the purchase of goods or services — instead they are unpaid cost claims from beneficiaries of grants or other EU funding. They are recorded as payables for the requested amount when the cost claim is received. Upon verification and acceptance of the eligible costs, the payables are valued at the accepted and eligible amount.

Payables arising from the purchase of goods and services are recognised at invoice reception for the original amount and corresponding expenses are entered in the accounts when the supplies or services are delivered and accepted by the entity.

1.4.10 Accrued and deferred income and charges

At the end of the accounting period, accrued expenses are recognised based on an estimated amount of the transfer obligation of the period. Revenue is also accounted for in the period to which it relates. At year-end, if an invoice is not yet issued but the service has been rendered, the supplies have been delivered by the entity or a contractual agreement exists, an accrued income will be recognised in the financial statements. In addition, at year-end, if an invoice is issued but the services have not yet been rendered or the goods supplied have not yet been delivered, the revenue will be deferred and recognised in the subsequent accounting period.

1.5. STATEMENT OF FINANCIAL PERFORMANCE

1.5.1 Revenue

Revenue from non-exchange transactions are taxes and transfers because the transferor provides resources to the recipient entity without the recipient entity providing approximately equal value directly in exchange. Transfers are inflows of future economic benefits or service potential from non-exchange transactions, other than taxes.

Exchange revenue from the sale of goods and services is recognised when the significant risk and rewards of ownership of the goods are transferred to the purchaser. Revenue associated with a transaction involving the provision of services is recognised by reference to the stage of completion of the transaction at the reporting date.

1.5.2 Expenses

Exchange expenses arising from the purchase of goods and services are recognised when the supplies are delivered and accepted by the entity. They are valued at original invoice amount. Futhermore, at the balance sheet date expenses related to the service delivered during the period for which an invoice has not yet been received or accepted are recognised in the statement of financial performance.

Non-exchange expenses relate to transfers to beneficiaries and can be of three types: entitlements, transfers under agreement and discretionary grants, contributions and donations. Transfers are recognised as expenses in the period during which the events giving rise to the transfer occurred, as long as the nature of the transfer is allowed by regulation or a contract has been signed authorising the transfer; any eligibility criteria have been met by the beneficiary; and a reasonable estimate of the amount can be made.

When a request for payment or cost claim is received and meets the recognition criteria, it is recognised as an expense for the eligible amount. At year-end, incurred eligible expenses due to the beneficiaries but not yet reported are estimated and recorded as accrued expense.

1.6. CONTINGENT ASSETS AND LIABILITIES

1.6.1 Contingent assets

A contingent asset is a possible asset that arises from past events and of which the existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity. A contingent asset is disclosed when an inflow of economic benefits or service potential is probable.

1.6.2 Contingent liabilities

A contingent liability is a possible obligation that arises from past events and of which the existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity; or a present obligation that arises from past events but is not recognised because: it is not probable that an outflow of resources embodying economic benefits or service potential will be required to settle the obligation or, in the rare circumstances where the amount of the obligation cannot be measured with sufficient reliability.

1.7. CO-FINANCING

Co-financing contributions received fulfil the criteria of revenues from non-exchange transactions under condition and they are presented as payables to Member States, non-Member States and others. The EDF is required to use the contributions to deliver services to third parties or is otherwise required to return the assets (the contributions received). The outstanding payables relating to co-financing agreements represent the co-financing contributions received less the expenses incurred related to the project. The effect on net assets is nil.

Expenses relating to co-financing projects are recognised as they are incurred. The corresponding amount of contributions is recognised as operating revenue and the effect on economic result of the year is nil.

2. NOTES TO THE BALANCE SHEET

NON-CURRENT ASSETS

2.1. PRE-FINANCING

EUR millions Eighth EDF Ninth EDF 10th EDF 11th EDF 31.12.2015 31.12.2014 Pre-financing — 63 368 84 516 472 Total — 63 368 84 516 472





EUR millions 31.12.2015 31.12.2014 Direct Management 65 72 Implemented by: Commission 43 47 EU executive agencies 1 3 EU delegations 21 22 Indirect Management 451 400 Implemented by: Third countries 25 22 International organisations 90 127 EIB and EIF 323 223 Public law bodies 10 24 Private law bodies with a public service mission 3 4 Total 516 472

Many contracts provide for payments of advances before the commencement of works, deliveries of supplies or the provision of services. Sometimes the payment schedules of contracts foresee payments on the basis of progress reports. Pre-financing is normally paid in the currency of the country or territory where the project is executed.

The timing of the recoverability or utilisation of the pre-financing governs whether it is disclosed as a current or a non-current pre-financing asset. The utilisation is defined by the project's underlying agreement. Any repayments or utilisation due within twelve months of the reporting date are disclosed as current pre-financing. As many of the EDF projects are long-term in nature, it is necessary that the related advances are available for more than one year. Thus some pre-financing amounts are shown as non-current assets, but since the Eighth and the Ninth EDFs are winding down, most pre-financing is current.

The increase in non-current pre-financing by EUR 44 million compared to 31 December 2014 is mainly explained by the implementation of new contracts under the 11th EDF and the extension of 2 significant contracts under the Ninth EDF.

2.2. TRUST FUND CONTRIBUTIONS

This heading represents the amount paid as contributions to the Bêkou EU Trust Fund less the estimated proportion of costs incurred by the trust fund.

The trust fund contributions are implemented by the EDF under the direct management mode.

CURRENT ASSETS

2.3. PRE-FINANCING

EUR millions Eighth EDF Ninth EDF 10th EDF 11th EDF 31.12.2015 31.12.2014 Pre-financing (gross) 14 265 3 032 939 4 250 4 335 Cleared via cut-off (11) (198) (2 153 ) (744) (3 105 ) (2 932 ) Total 3 67 879 195 1 145 1 403





EUR millions 31.12.2015 31.12.2014 Direct Management 284 227 Implemented by: Commission 123 116 EU executive agencies 1 4 EU delegations 159 106 Indirect Management 861 1 176 Implemented by: Third countries 229 257 International organisations 336 494 EIB and EIF 235 357 Public law bodies 56 41 Private law bodies with a public service mission 5 24 Private law bodies implementing Public Private Partnership 0 2 Total 1 145 1 403

The decrease in current pre-financing by EUR 298 million compared to 31 December 2014 is mainly explained by a number of clearings under the Ninth and 10th EDF.

2.3.1. Guarantees received in respect of pre-financing

Guarantees are held to secure pre-financing and are released when the final claim under a project is paid. At 31 December 2015 the nominal value of guarantees received by the EDF in respect of pre-financing amounts to EUR 198 million. At year-end, an in-depth review of guarantees has been performed to comply with the accounting standards. Following this review, guarantees in respect of pre-financing with a nominal value of EUR 444 million have been written-off as not belonging to the EDF but to the contracting authority.

2.4. RECEIVABLES

EUR millions Note Eighth EDF Ninth EDF 10th EDF 11th EDF 31.12.2015 31.12.2014 Receivables from customers, public bodies, EFTA and third states 2.4.1 1 5 6 2 13 21 Receivables from Member States 2.4.2 — — 90 — 90 0 Accrued income and deferred charges 2.4.3 — 60 7 — 67 63 Total 1 65 103 2 171 84





EUR millions 31.12.2015 31.12.2014 Recoverables from non-exchange transactions 104 21 Receivables from exchange transactions 67 63 Total 171 84

2.4.1. Receivables from customers, public bodies, EFTA and third states

EUR millions Eighth EDF Ninth EDF 10th EDF 11th EDF 31.12.2015 31.12.2014 Receivables from customers, public bodies and third states 4 22 15 2 42 49 Write-down (3) (17) (10) — (29) (28) Total 1 5 6 2 13 21

2.4.2 Receivables from Member States

Receivables from Member States include amounts to be received as well as the amounts to be deducted from the future Member States contributions. This is a consequence of Bridging Facility adjustments (see note 2.10 Called fund capital — active EDFs).

EUR millions Member States Amounts to be received by MS Amounts to be deducted from MS's contributions Net amount at 31.12.2015 Belgium 1 (5) Denmark (2) Greece 3 Ireland 2 Luxemburg — Portugal 3 Spain 28 United Kingdom 16 Austria (3) Finland — Cyprus 1 Czech Republic 7 Estonia 1 Hungary 8 Lithuania 1 Latvia 1 Malta — Poland 18 Slovenia 3 Slovakia 3 Romania 5 Total 101 (11) 90

2.4.3 Accrued income and deferred charges

Accrued income and deferred charges include primarily accrued interest on pre-financing amounts.

2.5. LIAISON ACCOUNTS

EUR millions Eighth EDF Ninth EDF 10th EDF 11th EDF 31.12.2015 Liaison accounts 214 657 1 190 (2 062 ) — Total 214 657 1 190 (2 062 ) —

For efficiency reasons, the single treasury covering all the EDFs is allocated to the 11th EDF (9); this leads to operations between the various EDFs, which are balanced out in the liaison accounts between the various EDF balance sheets. Liaison accounts are presented only in the individual EDFs.

2.6. CASH AND CASH EQUIVALENTS (10)

EUR millions Eighth EDF Ninth EDF 10th EDF 11th EDF 31.12.2015 31.12.2014 Special accounts: Financial institutions of Member States — — — 489 489 378 Current accounts: Commercial banks — — — 14 14 13 Democratic Republic Congo Special fund (***) — — — 1 1 1 Total — — — 504 504 391

The overall increase in cash and cash equivalents is mainly explained by the advance payment of the first 2016 contributions by some Member States in December 2015.

It should be noted that there are STABEX funds held by beneficiary ACP States and thus not included on the EDF balance sheet. STABEX is the acronym for a EU compensatory finance scheme to stabilise export earnings of the ACP countries. Once the Commission and the beneficiary (ACP) State reach agreement on how the STABEX funds are to be utilised, a transfer convention is signed by both parties. In accordance with the provisions of Article 211 of the Lomé IV Agreement (11) (as revised), the funds are transferred into an interest bearing double signature account (Commission and Beneficiary State) opened in the name of the ACP State. The funds remain in these double signature accounts until a Framework of Mutual Obligations (FMO) justifies a transfer for a project. The Commission's Authorising Officer retains the power of signature over the account in order to ensure that the funds are disbursed as intended. The funds in the double signature accounts are the property of the ACP State and are consequently not recorded as assets in the EDF accounts. The transfers to these accounts are recorded as STABEX payments. See also note 3.2.1 for more information.

With the aim of improving the presentation in the 2015 annual accounts, the classification of financial insitutions and banks has been reviewed. The comparative figures for 2014 are disclosed accordingly.

NON-CURRENT LIABILITIES

2.7. PROVISIONS

EUR millions Eighth EDF Ninth EDF 10th EDF 11th EDF 31.12.2015 31.12.2014 Provisions — — — 4 4 — Total — — — 4 4 —

This is the estimate of amounts that will probably have to be paid out more than 12 months after the year-end in relation to the liquidation phase and a probable legal case with the Centre de Development of Enterprise.

The liquidation phase, to be managed by a Curator, will only comprise residual administrative tasks, for example keeping the archives of the CDE, replying to any administrative formality, or managing residual litigations that could not have been settled up to 31 December 2016. This phase will be financed by the EDF and at the date of preparation of the EDF financial statements, a very rough budget estimate of the total costs needed for the passive phase is EUR 2,6 million. An amount of around EUR 1,2 million should be as well taken into account in case the CDE will be condemned by the International Labour Organisation Tribunal to pay indemnities for the three persons currently in litigation. See also note 4.2.1 for more information.

2.8. PAYABLES

EUR millions Eighth EDF Ninth EDF 10th EDF 11th EDF 31.12.2015 31.12.2014 Co-financing — payables — — 10 — 10 34 Total — — 10 — 10 34

The change in the total co-financing payables is explained in the note 2.9.1.2.

CURRENT LIABILITIES

2.9. PAYABLES

EUR millions Note Eighth EDF Ninth EDF 10th EDF 11th EDF 31.12.2015 31.12.2014 Current payables 2.9.1 0 13 184 17 215 474 Accrued charges 2.9.2 3 114 684 54 854 722 Deferred fund capital contribution 2.9.3 — — 307 — 307 228 Total 3 128 1 174 71 1 376 1 423

2.9.1 Current payables

EUR millions Note Eighth EDF Ninth EDF 10th EDF 11th EDF 31.12.2015 31.12.2014 Suppliers and other 2.9.1.1 0 14 153 14 181 403 Co-financing payables 2.9.1.2 — (0) 31 (0) 31 67 Sundry payables 2.9.1.3 (0) (1) (0) 4 3 4 Total 0 13 184 17 215 474

Payables include cost statements received by the EDF relating to its grant activity. They are recorded for the amount being claimed from the moment the demand is received. The same procedure applies to invoices and credit notes received under procurement activities. The cost claims concerned have been taken into account for the year-end cut-off procedures. Following the cut-off entries, estimated eligible amounts have been recognised in the statement of financial performance.

2.9.1.1 Suppliers and other

Included under this heading are amounts owed to suppliers as well as amounts payable to public bodies and third states.

The decrease of EUR 222 million compared to the previous reporting period relates primarly to a EUR 224 million decrease in payables to third states.

2.9.1.2 Co-financing payables

The total non-current and current co-financing payables decreased by EUR 60 million compared to the previous reporting period.

During 2015, new co-financing contributions were received from the France (EUR 5 million), United Kingdom (EUR 1,5 million) and other countries.

The total non-current and current co-financing payables were decreased by EUR 69 million in order to recognise revenue and expenses related to co-financing projects (see 3.2.2 and 3.3.2).

2.9.1.3 Sundry payables

Sundry payables mainly comprise unallocated cash receipts and returned payments.

2.9.2 Accrued charges

EUR millions Eighth EDF Ninth EDF 10th EDF 11th EDF 31.12.2015 31.12.2014 Accrued charges 3 114 684 54 854 722 Total 3 114 684 54 854 722

At year-end, an assessment is made concerning eligible expenses incurred by beneficiaries of EDF funds but not yet reported. Following these cut-off calculations, estimated eligible amounts are recorded as accrued charges.

In 2015 the Commission refined its methodology for estimating accrued charges for the budget support contracts. Had this refinement not been made, the operating expenses would have been EUR 3 545 million instead of EUR 3 671 million and the accrued charges amount would have been EUR 126 million lower.

2.9.3 Deferred fund capital contribution

EUR millions Eighth EDF Ninth EDF 10th EDF 11th EDF 31.12.2015 31.12.2014 United Kingdom — — 259 — 259 222 Sweden — — 48 — 48 — Czech Republic — — — — — 4 Lithuania — — — — — 1 Total — — 307 — 307 228

These are Member States' contributions paid in advance.

NET ASSETS

2.10. CALLED FUND CAPITAL — ACTIVE EDFs

EUR millions Eighth EDF Ninth EDF 10th EDF 11th EDF Total Fund capital 12 840 11 699 21 152 — 45 691 Uncalled fund capital — — (10 018 ) — (10 018 ) Called fund capital 31.12.2014 12 840 11 699 11 134 — 35 673 Fund capital 12 164 10 973 20 960 29 367 73 464 Uncalled fund capital — — (5 223 ) (29 367 ) (34 590 ) Called fund capital 31.12.2015 12 164 10 973 15 737 — 38 873

The fund capital represents the total amount of contributions from Member States for the relevant EDF fund as laid down in each of the Internal Agreements. The uncalled funds represent the initial allocation not yet called up from Member States.

The called fund capital represents the amount of the initial allocations which have been called up for transfer to the treasury accounts by the Member States.

The capital of the Eighth and the Ninth EDF has been called up and received in its entirety.

The activities of the Bridging Facility were financed through decommitted amounts from previous EDFs (see 2.13 Called fund capital transfers between active EDFs).

The Council decision establishing the Bridging Facility stipulates that the funds committed under the Bridging Facility should be deducted from the shares of the Member States' contributions set out in Article 1(2)(a) of the Internal Agreements of the Eighth, Ninth and 10th EDF after the entry into force of the 11th EDF Internal Agreement. (2)

The 11th EDF internal Agreement entered into force on 1 March 2015 and total fund capital has been decreased by EUR 1 595 million (Eighth EDF — EUR 676 million, Eighth EDF — EUR 727 million, 10th EDF — EUR 192 million).

As the Internal Agreement establishing the 11th EDF enters into force, fund capital presented under the 11th EDF has been recognised in line with the Agreement.

2.11. CALLED AND UNCALLED FUND CAPITAL BY MEMBER STATES

EUR millions Contributions % Uncalled 10th EDF 31.12.2014 Called up in 2015 Reduction of the 10th EDF capital Uncalled 10th EDF 31.12.2015 Austria 2,41 (241) 111 5 (126) Belgium 3,53 (354) 162 7 (184) Bulgaria 0,14 (14) 6 0 (7) Cyprus 0,09 (9) 4 0 (5) Czech Republic 0,51 (51) 23 1 (27) Denmark 2,00 (200) 92 4 (104) Estonia 0,05 (5) 2 0 (3) Finland 1,47 (147) 68 3 (77) France 19,55 (1 958 ) 900 38 (1 021 ) Germany 20,50 (2 053 ) 944 39 (1 070 ) Greece 1,47 (147) 68 3 (77) Hungary 0,55 (55) 25 1 (29) Ireland 0,91 (91) 42 2 (48) Italy 12,86 (1 288 ) 592 25 (672) Latvia 0,07 (7) 3 0 (4) Lithuania 0,12 (12) 6 0 (6) Luxemburg 0,27 (27) 12 1 (14) Malta 0,03 (3) 1 0 (2) Netherlands 4,85 (486) 223 9 (253) Poland 1,30 (130) 60 2 (68) Portugal 1,15 (115) 53 2 (60) Romania 0,37 (37) 17 1 (19) Slovakia 0,21 (21) 10 0 (11) Slovenia 0,18 (18) 8 0 (9) Spain 7,85 (786) 361 15 (410) Sweden 2,74 (274) 126 5 (143) United Kingdom 14,82 (1 485 ) 682 28 (774) Total 100,00 (10 018 ) 4 603 192 (5 223 )

Capital called in 2015 consists of ordinary call (EUR 3 200 million) and special call (called ‘special consumption’ — EUR 1 403 million). The special call was made in order to get funds for the reduction of the capital of the Eighth and Ninth EDF.

2.12. CALLED FUND CAPITAL FROM CLOSED EDFs CARRIED FORWARD

EUR millions Eighth EDFF Ninth EDF 10th EDF 11th EDF Total Funds transferred from closed EDFs 627 1 625 — — 2 252 Balance at 31.12.2015 627 1 625 — — 2 252

This heading includes the resources transferred from closed EDFs to the Eighth and Ninth EDFs.

2.13. CALLED FUND CAPITAL TRANSFERS BETWEEN ACTIVE EDFs

EUR millions Eighth EDF Ninth EDF 10th EDF 11th EDF Total Balance at 31.12.2013 (3 083 ) 2 130 952 — 0 Transfer of decommitted amounts to the 10th EDF performance reserve from previous EDFs (64) (372) 436 0 Transfer of decommitted amounts to the 11th EDF performance reserve from previous EDFs (225) 225 0 Transfer from the 10th and 11th performance reserves to the Bridging Facility (1 372 ) 1 372 0 Balance at 31.12.2014 (3 147 ) 1 758 (209) 1 597 0 Transfer of decommitted amounts to the 10th EDF performance reserve from previous EDFs (6) (109) 114 0 Transfer of decommitted amounts to the 11th EDF performance reserve from previous EDFs (32) 32 0 Transfer from the 10th and 11th performance reserves to the Bridging Facility (41) 41 0 Recoveries from the Bridging Facility to the 10th and 11th performance reserves 11 (11) 0 Return of funds committed under the Bridging Facility 676 727 192 (1 595 ) 0 Balance at 31.12.2015 (2 476 ) 2 376 35 65 0

This heading includes the resources transferred between the active EDFs.

Since the entry into force of the Cotonou Agreement, all the unspent funds in previous active EDFs are transferred to the most recently opened EDF after decommitment. The resources transferred from other EDFs increase the appropriations of the receiving fund and reduce the appropriations of the fund of origin. Funds transferred to the performance reserve of the 10th and 11th EDFs can be committed only under specific conditions set out in the Internal Agreements.

In 2015 funds committed under the Bridging Facility of EUR 1 595 million came back to the performance reserve of the 10th EDF and they were used to refund capital of the Eighth, Ninth and 10th EDF (see 2.10 Called fund capital — active EDFs).

At year-end the non-mobilisable Performance Reserve of the 10th EDF is EUR 84 million while the one of the 11th EDF is EUR 65 million.

3. NOTES TO THE STATEMENT OF FINANCIAL PERFORMANCE

3.1. REVENUE FROM EXCHANGE AND NON-EXCHANGE TRANSACTIONS

EUR millions 2015 2014 Revenue from non-exchange transactions 89 87 Revenue from exchange transactions 51 59 Total 140 145

The EUR 89 million of revenue from non-exchange transactions is exclusively operating revenue while the EUR 51 million of revenue from exchange transactions comprises operating revenue (EUR 43 million) and financial revenue (EUR 8 million — see note 3.5).

3.2. OPERATING REVENUE

EUR millions Note Eighth EDF Ninth EDF 10th EDF 11th EDF 2015 2014 Recovery of expenses 3.2.1 1 10 9 1 20 26 Recovery of STABEX funds 3.2.2 1 — — — 1 4 Foreign exchange gains 3 15 22 2 42 45 Operating income co-financing 3.2.3 — — 68 1 69 57 Total 4 24 99 5 132 132





EUR millions 2015 2014 Direct Management 61 17 Implemented by: Commission 3 0 EU delegations 58 17 Indirect Management 29 70 Implemented by: Third countries 14 68 International organisations 14 1 Public law bodies 0 — Private law bodies with a public service mission 1 — Total operating revenue excluding foreign exchange gains 90 86

3.2.1 Recovery of STABEX funds

During 2015, EUR 1 million was returned to the EDF from double signature accounts in ACP countries. These revenues are included in operating income (recovery of STABEX funds) in the statement of financial perfomance of the Eighth EDF.

3.2.2 Operating income co-financing

The operating income relating to co-financing represents the contributions used (see 3.3.2).

3.3. OPERATING EXPENSES

EUR millions Note Eighth EDF Ninth EDF 10th EDF 11th EDF 2015 2014 Operating expenses aid instruments 3.3.1 (5) 47 2 197 820 3 059 3 545 Operating expenses co-financing 3.3.2 — — 68 1 69 57 Foreign exchange losses 3 14 24 3 44 33 Write-down of receivables & provisions for Risk and charges (0) (5) 8 4 7 14 Total (2) 56 2 297 828 3 179 3 650





EUR millions 2015 2014 Direct Management 1 106 933 Implemented by: Commission 99 114 EU executive agencies 2 2 EU delegations 1 000 817 Trust Funds 5 — Indirect Management 2 023 2 670 Implemented by: Third countries 900 1 111 International organisations 990 1 148 EIB and EIF 31 179 Public law bodies 70 144 Private law bodies with a public service mission 31 46 Private law bodies implementing Public Private Partnership 1 41 Persons implementing CFSP actions 0 — Total operating expenses: aid instruments and co-financing 3 128 3 603

3.3.1. Operating expenses — aid instruments

EUR millions Eighth EDF Ninth EDF 10th EDF 11th EDF 2015 2014 Programmable aid 1 18 1 557 394 1 971 2 159 Macro-economic support — 51 — — 51 42 Sectoral policy 0 (25) — — (24) 10 Interest rate subsidies (6) — — — (6) 3 Intra ACP projects — 5 459 282 746 979 Emergency aid — 1 167 117 285 335 Refugee aid 0 — — — 0 (0) Risk capital — — — — — 0 STABEX — — — — — 2 SYSMIN (0) — — — (0) 0 Other aid programmes related to former EDFs — 0 — — 0 2 Institutional support — — 13 20 34 19 Compensation export receipts 0 (3) — — (3) (5) Contributions to Trust Funds — — — 5 5 — Total (5) 47 2 197 820 3 059 3 545

The EDF operating expenditure covers various aid instruments and takes different forms, depending on how the money is paid out and managed.

3.3.2. Operating expenses co-financing

These are the expenses incurred on co-financing projects in 2015. As the co-financing contributions received fulfil the criteria of revenues from non-exchange transactions under condition, a corresponding amount of contributions has been recognised as operating revenue (see 3.2.2).

3.4. ADMINISTRATIVE EXPENSES

EUR millions Eighth EDF Ninth EDF 10th EDF 11th EDF 2015 2014 Administrative expenses 0 (0) 34 79 113 22 Total 0 (0) 34 79 113 22

This heading includes support expenditure, i.e. the administrative costs related to the programming and implementation of the EDFs. This includes expenses for preparation, follow-up, monitoring, and evaluation of projects as well as expenses for computer networks, technical assistance etc.

The variation in the administrative costs between 2014 and 2015 (EUR 91 million) is due to a change in accounting methodology in 2014. This new methodology had a one-time impact on decreasing the amount of administrative costs.

3.5. FINANCIAL REVENUE

EUR millions Eighth EDF Ninth EDF 10th EDF 11th EDF 2015 2014 Interest income-European banks (0) (0) (0) 2 1 (1) Interest on pre-financing — 6 0 0 7 15 Accrued interest — 4 0 — 4 11 Recovered interest — 2 0 0 3 3 Total (0) 6 0 2 8 13

Interest on pre-financing is recognised in accordance with the provisions of Article 9(2)d of the Financial Regulation applicable to the 11th EDF.

Financial revenue is considered as revenue from exchange transactions.

4. CONTINGENT ASSETS & LIABILITIES AND OTHER SIGNIFICANT DISCLOSURES

4.1. CONTINGENT ASSETS

EUR millions Eighth EDF Ninth EDF 10th EDF 11th EDF 31.12.2015 31.12.2014 Performance guarantees 0 7 7 (0) 13 101 Retention guarantees — 3 3 — 6 50 Total 0 10 10 (0) 20 150

Overall, the amount of guarantees held to secure EDF assets under a project has increased in 2015. However, in 2015, more guarantees have been linked to contracts managed with an indirect mode. In such case, the beneficiary of the guarantee is not the EDF but the contracting authority. By comparison, in 2014, those guarantees belonging to a contracting authority other than the EDF amounted to 273 million while they amount to 723 million in 2015.

4.1.1. Performance guarantees

Performance guarantees are sometimes requested to ensure that beneficiaries of EDF funding meet the obligations of their contracts with the EDF.

4.1.2. Retention guarantees

Retention guarantees concern only works contracts. Typically, 10 % of the interim payments to beneficiaries are withheld to ensure that the contractor fulfils his/her obligations. These withheld amounts are reflected as amounts payable. Subject to the approval of the contracting authority, the contractor may instead submit a retention guarantee which replaces the amounts withheld on interim payments. These received guarantees are disclosed as contingent assets.

4.2. CONTINGENT LIABILITIES

4.2.1. Centre for the Development of Enterprise

The ACP-EU Council of Ministers agreed in June 2014 ‘to proceed with the orderly closing of the CDE’, and at the same time ‘to ensure that the private sector support projects implemented by the CDE in ACP countries and regions are completed in full’. For this purpose, the ACP-EU Council of Ministers granted a delegation of powers to the ACP-EU Committee of Ambassadors to take this matter forward with a view to adopt the necessary decisions.

The ACP-EU Committee of Ambassadors authorised, by Decision No 4/2014 of 23/10/2014, the Executive Board of the CDE to take, with immediate effect, all appropriate measures to prepare for the closure of the CDE. As stipulated in article 2 of that Decision, the Executive Board was instructed to contract a Curator to prepare and implement a closure plan. That closure plan ‘should permit the closure of the CDE in an orderly manner, while respecting the rights of all involved third parties, and ensuring that the ongoing private sector support projects are completed either by the CDE itself or by an entity to whom their management can be assigned’. The closure plan is to envisage the finalisation of the winding-up of the CDE by 31 December 2016.

The curator has submitted to the CDE Executive Board, at the end of June 2015, a definitive strategic plan, with a budget and work-plan, which reflects the outcome of the social dialogue. The budget of the definitive strategic plan, approved by the CDE Executive Board, had been the basis for the Commission's proposal for a Financing Decision, that has been adopted after having received the opinion of the EDF Committee for a total of EUR 18,2 million. Subsequent to the adoption of that Financing decision, a grant agreement was concluded in December 2015 between the CDE and the Commission which provides the necessary financing for the realization of CDE's assets and full settlement of its liabilities. The implementation of the definitive strategic plan started on 1 January 2016. Following the revision of the Annex III of the Cotonou Agreement, currently under negotiation between the EU Council and the ACP, the CDE will enter into its passive phase during which it will solely exist for the needs of its liquidation — as from 1 January 2017 and for a period that will last up to 5 years. See also note 2.7 for more information.

4.3. OTHER SIGNIFICANT DISCLOSURES

4.3.1. Outstanding commitments not yet expensed

The amount disclosed below is the budgetary RAL (‘Reste à Liquider’) less related amounts that have been included as expenses in the 2015 statement of financial performance. The budgetary RAL is an amount representing the open commitments for which payments and/or de-commitments have not yet been made. This is the normal consequence of the existence of multi-annual programmes.

EUR millions Eighth EDF Ninth EDF 10th EDF 11th EDF 31.12.2015 31.12.2014 Outstanding commitments not yet expensed 5 303 3 174 2 338 5 821 5 291 Total 5 303 3 174 2 338 5 821 5 291

At 31 December 2015 the budgetary RAL totalled EUR 6 809 million (2014: EUR 5 889 million). In December 2015, EUR 1 316 million were committed to finance the new Emergency EU Trust Fund for stability and addressing root causes of illegal migration in Africa (EU Trust Fund Africa). When excluding the effect of that exceptional event, the RAL would amount to EUR 5 493 million, which represents a reduction of EUR 396 million compared to the previous year.

5. FINANCIAL RISK MANAGEMENT

The following disclosures with regard to the financial risk management of the EDF relate to the treasury operations carried out by the Commission on behalf of the EDF in order to implement its resources.

5.1. RISK MANAGEMENT POLICIES AND HEDGING ACTIVITIES

The rules and principles for the management of the treasury operations are laid down in the 11th EDF Financial Regulation and in the Internal Agreement.

As a result of the above regulation, the following main principles apply:

— The EDF contributions are paid by Member States in special accounts opened with the bank of issue of each Member State or the financial institution designated by it. The amounts of the contributions shall remain in those special accounts until the payments of EDF need to be made.

— EDF contributions are paid by Member States in EUR, while the EDF's payments are denominated in EUR and in other currencies, including less well-known ones.

— Bank accounts opened by the Commission on behalf of the EDF may not be overdrawn.

In addition to the special accounts, other bank accounts are opened by the Commission in the name of the EDF, with financial institutions (central banks and commercial banks), for the purpose of executing payments and receiving receipts other than the Member State contributions to the budget.

Treasury and payment operations are highly automated and rely on modern information systems. Specific procedures are applied to guarantee system security and to ensure segregation of duties in line with the Financial Regulation, the Commission’s internal control standards, and audit principles.

A written set of guidelines and procedures regulate the management of the treasury and payment operations with the objective of limiting operational and financial risk and ensuring an adequate level of control. They cover the different areas of operation, and compliance with the guidelines and procedures is checked regularly.

5.2. CURRENCY RISK

Exposure of the EDF to currency risk at year end — net position

EUR millions 31.12.2015 31.12.2014 USD GBP DKK SEK EUR Other Total USD GBP DKK SEK EUR Other Total Financial assets Receivables and recoverables — — — — 171 1 171 0 — — — 76 8 84 Cash and cash equivalents 4 0 — — 500 — 504 6 0 — — 386 — 391 Total 4 0 — — 671 1 675 6 0 — — 462 8 475 Financial liabilities Payables 0 — — — (485) (47) (532) 0 — — — (691) (45) (736) Total 0 — — — (485) (47) (532) 0 — — — (691) (45) (736) Total 4 0 — — 186 (46) 143 6 0 — — (229) (37) (261)

All contributions are held in EUR, and other currencies are purchased only when they are needed for the execution of payments. As a result the EDF's treasury operations are not exposed to currency risk.

5.3. INTEREST RATE RISK

The EDF does not borrow money and as a consequence it is not exposed to interest rate risk.

Interest is accrued on balances it holds on its different banks accounts. The Commission, on behalf of the EDF, has therefore put in place measures to ensure that interest earned regularly reflect market interest rates as well as their possible fluctuation.

Overnight balances held on commercial bank accounts are remunerated on a daily basis. The remuneration of balances on such accounts is based on variable market rates to which a contractual margin (positive or negative) is applied. For most of the accounts the interest calculation is linked to a market reference rate and is adjusted to reflect any fluctuations of this rate. As a result no risk is taken by the EDF that its balances be remunerated at rates lower than market rates.

5.4. CREDIT RISK (COUNTERPARTY RISK)

Financial assets that are neither past due nor impaired:

EUR millions Total Neither past due nor impaired Past due but not impaired < 1 year 1-5 years > 5 years Receivables and recoverables 171 50 120 1 — Total at 31.12.2015 171 50 120 1 — Receivables Recoverables 84 75 5 4 Total at 31.12.2014 84 75 5 4 —





Financial assets by risk category:

EUR millions 31.12.2015 31.12.2014 Receivables Cash Total Receivables Cash Total Counterparties with external credit rating Prime and high grade 6 167 173 0 318 318 Upper medium grade 34 16 50 — 39 39 Lower medium grade 36 312 348 — 7 7 Non- investment grade 14 9 23 — 27 27 Total 90 503 593 0 391 391 Counterparties without external credit rating Debtors without defaults in the past 81 1 98 83 83 Debtors with defaults in the past — — — 1 1 Total 97 1 98 84 84 Total 171 504 692 84 391 475

Funds in the categories non-investment grade and lower medium grade relate mainly to Member State contributions to the EDF paid to the special accounts opened by Member States in accordance with Article 22(3) of the EDF FR. According to this regulation the amount of such contributions must remain in those special accounts until the payments need to be made.

Most of the EDF's treasury resources are kept, in accordance with the EDF FR, in the ‘special accounts’ opened by Member States for the payment of their contributions. The majority of such accounts are held with Member States' treasuries or national central banks. These institutions carry the lowest counterparty risk for the EDF (exposure is with its Member States).

For the part of the EDF's treasury resources kept with commercial banks in order to cover the execution of payments, replenishment of these accounts is executed on a just-in-time basis and is automatically managed by the Commission treasury's cash management system. Minimum cash levels, proportional to the average amount of daily payments made from it, are kept on each account. As a consequence the amounts kept overnight on these accounts remain constantly at low levels which ensure the EDF's risk exposure is limited.

In addition, specific guidelines are applied for the selection of commercial banks in order to further minimise counterparty risk to which the EDF is exposed.

All commercial banks are selected by call for tenders. The minimum short-term credit rating required for admission to the tendering procedures is Moody's P-1 or equivalent (S&P A-1 or Fitch F1). A lower level may be required in specific and duly justified circumstances.

5.5. LIQUIDITY RISK

Maturity analysis of financial liabilities by remaining contractual maturity

EUR millions < 1 year 1-5 years > 5 years Total Payables 522 10 532 Total at 31.12.2015 522 10 — 532 Payables 702 34 736 Total at 31.12.2014 702 34 — 736

Budget principles applied to the EDF ensure that overall cash resources for the budgetary period are always sufficient for the execution of all related payments. Indeed the total Member States' contributions equal the overall amount of payment appropriations for the relevant budgetary period.

Member States contributions to EDF, however, are paid in three instalments per year, while payments are subject to certain seasonality.

In order to ensure that treasury resources are always sufficient to cover the payments to be executed in any given month, information on the treasury situation is regularly exchanged between the Commission' treasury and the relevant spending departments in order to ensure that payments executed in any given period do not exceed the available treasury resources.

In addition to the above, in the context of the EDF's daily treasury operations, automated cash management tools ensure that sufficient liquidity is available on each of the EDF's bank accounts, on a daily basis.

6. RELATED PARTY DISCLOSURES

The related parties of the EDF are Bêkou and Africa EU Trust Funds. Transactions between these entities take place as part of the normal operations of the EDF and as this is the case, no specific disclosure requirements are necessary for these transactions in accordance with the EU accounting rules.

The EDF has no separate management since it is managed by the Commission. The entitlements of the key management of the EU, including the Commission, have been disclosed in the Consolidated annual accounts of the European Union under heading 8.2 ‘Key management entitlements’.

7. EVENTS AFTER THE BALANCE SHEET DATE

At the date of transmission of these accounts, no material issues had come to the attention of the Accounting Officer of the EDF or were reported to him that would require separate disclosure under this section. The annual accounts and related notes were prepared using the most recently available information and this is reflected in the information presented above.

8. RECONCILIATION OF ECONOMIC RESULT AND BUDGET RESULT

The economic result of the year is calculated on the basis of accrual accounting principles. The budget result is however based on cash accounting rules. As the economic result and the budget result both cover the same underlying operational transactions, it is a useful control to ensure that they are reconcilable. The table below shows this reconciliation, highlighting the key reconciling amounts, split between revenue and expenditure items.

EUR millions 2015 2014 ECONOMIC RESULT OF THE YEAR (3 152 ) (3 526 ) Revenue Entitlements not affecting the budget result (1) (10) Entitlements established in current year but not yet collected (11) (19) Entitlements established in previous years and collected in current year 19 12 Net effect of pre-financing 28 41 Accrued revenue (net) 29 (71) Expenses Expenses of the current year not yet paid 61 165 Expenses of previous years paid in the current year (221) (28) Payments cancellation 12 65 Net effect of pre-financing (53) (562) Accrued expenses (net) 200 417 BUDGET RESULT OF THE YEAR (3 088 ) (3 516 )

8.1. RECONCILING ITEMS — REVENUE

The budgetary revenue of a financial year corresponds to the revenue collected from entitlements established in the course of the year and amounts collected from entitlements established in previous years.

The entitlements not affecting the budget result are recorded in the economic result but from a budgetary perspective cannot be considered as revenues as the cashed amount is transferred to reserves and cannot be recommitted without a Council decision.

The entitlements established in the current year but not yet collected are to be deducted from the economic result for reconciliation purposes as they do not form part of budgetary revenue. On the contrary, the entitlements established in previous years and collected in the current year must be added to the economic result for reconciliation purposes.

The net effect of pre-financing is the clearing of the recovered pre-financing amounts. This is a cash receipt which has no impact on the economic result.

The net accrued revenue mainly consists of accruals made for year-end cut-off purposes. Only the net effect, i.e. the accrued revenue of the current year less the reversal of accrued revenue of the previous year, is taken into consideration.

8.2. RECONCILING ITEMS — EXPENDITURE

Expenses of the current year not yet paid are to be added for reconciliation purposes as they are included in the economic result but do not form part of budgetary expenditure. On the contrary, the expenses of previous years paid in the current year must be deducted from the economic result for reconciliation purposes as they are part of the current year's budgetary expenditure but have either no effect on the economic result or they decrease the expenses in case of corrections.

The cash receipts from payment cancellations do not affect the economic result whereas they impact the budget result.

The net effect of pre-financing is the combination of the new pre-financing amounts paid in the current year (recognised as budgetary expenditure of the year) and the clearing of pre-financing paid in the current year or previous years through the acceptance of eligible costs. The latter represents an expense in accrual terms but not in the budgetary accounts since the payment of the initial pre-financing had already been considered as a budgetary expenditure at the time of its payment.

The net accrued expenses mainly consist of accruals made for year-end cut-off purposes, i.e. eligible expenses incurred by beneficiaries of EDF funds but not yet reported to the EDF. Only the net effect, i.e. the accrued expenses of the current year less the reversal of accrued expenses of the previous year, is taken into consideration.

FINANCIAL STATEMENTS OF THE BÊKOU TRUST FUND (12)

CERTIFICATION OF THE ACCOUNTS

The annual accounts of the Bêkou EU Trust Fund for the year 2015 have been prepared in accordance with the Financial Regulation applicable to the general budget of the European Union and the accounting rules adopted by myself in my capacity as the Commission's Accounting Officer, as are to be applied by all the institutions and Union bodies.

I acknowledge my responsibility for the preparation and presentation of the annual accounts of the Bêkou EU Trust Fund in accordance with Article 68 of the Financial Regulation.

I have obtained from the authorising officers, who certified its reliability, all the information necessary for the production of the accounts that show the Bêkou EU Trust Fund's assets and liabilities and the budgetary implementation.

I hereby certify that based on this information, and on such checks as I deemed necessary to sign off the accounts, I have a reasonable assurance that the accounts present fairly, in all material aspects, the financial position, the results of the operations and the cash-flow of the Bêkou EU Trust Fund.

[signed] Manfred KRAFF Accounting Officer

BACKGROUND INFORMATION ON THE BÊKOU EU TRUST FUND

In accordance with Article 187(1) of the Financial Regulation applicable to the general budget of the Union (EU FR) and Article 42 of the Financial Regulation applicable to the 11th European Development Fund, the Commission is authorised to create Union Trust Funds for external actions under an agreement concluded with other donors. These trust funds may be created for emergency, post-emergency and thematic actions. The constitutive act of each trust fund defines its objectives.

The first multi-donor EU Trust Fund called Bêkou, which means ‘hope’ in Sango, was established on 15 July 2014, by the EU (represented by DGs DEVCO and ECHO, and the EEAS) and three of its Member States (Germany, France and the Netherlands), with the aim of promoting the stabilisation and reconstruction of the Central African Republic. It has been established for a maximum duration of 60 months in order to provide a medium-term response. At the end of 2015 7 donors contributed to the Bêkou Trust Fund: the European Development Fund, the European Commission via the EU Budget, 4 Member States and 1 non-Member State.

Union trust funds for external actions are required to prepare and adopt their own annual accounts. As the Bêkou EU Trust Fund was established under the EDF, its annual accounts will be consolidated in those of the EDF. The preparation of the annual accounts is entrusted to the Bêkou EU Trust Fund Accounting Officer, who is the Accounting Officer of the Commission, in accordance with Article 187(6) EU FR.

BÊKOU TRUST FUND BALANCE SHEET

EUR '000 Note 31.12.2015 31.12.2014 NON-CURRENT ASSETS Pre-financing 1.1 3 446 — CURRENT ASSETS Pre-financing 1.2 6 047 — Exchange receivables and non-exchange recoverables 1.3 1 364 — Cash and cash equivalents 1.4 52 461 45 000 59 873 45 000 TOTAL ASSETS 63 319 45 000 NON-CURRENT LIABILITIES Financial liabilities 1.5 (63 125 ) (45 000 ) (63 125 ) (45 000 ) CURRENT LIABILITIES Accrued charges and deferred income (193) — (193) — TOTAL LIABILITIES (63 319 ) (45 000 ) NET ASSETS — — FUNDS & RESERVES Economic result of the year — — NET ASSETS — —

BÊKOU TRUST FUND STATEMENT OF FINANCIAL PERFORMANCE

EUR '000 Note 2015 2014 REVENUE Revenue from non-exchange transactions Revenue from donations 2.1 9 354 — Revenue from exchange transactions Financial income 101 — Total 9 455 — EXPENSES Operating expenses 2.2 (8 824 ) — Other expenses 2.3 (631) — Total (9 455 ) — ECONOMIC RESULT OF THE YEAR — —

BÊKOU TRUST FUND CASHFLOW STATEMENT

EUR '000 Note 2015 2014 Economic result of the year — — OPERATING ACTIVITIES (Increase)/decrease in pre-financing (9 493 ) — (Increase)/decrease in exchange receivables and non-exchange recoverables (1 364 ) — Increase/(decrease) in non-current liabilities 18 125 45 000 Increase/(decrease) in current liabilities 193 — NET CASHFLOW 7 461 45 000 Net increase/(decrease) in cash and cash equivalents 7 461 45 000 Cash and cash equivalents at the beginning of the year 45 000 — Cash and cash equivalents at year-end 1.4 52 461 45 000

BÊKOU TRUST FUND STATEMENT OF CHANGES IN NET ASSETS

EUR '000 Accumulated surplus/ (deficit) Economic result of the year Net assets BALANCE AS AT 31.12.2014 — — — Economic result of the year — — — BALANCE AS AT 31.12.2015 — — —

NOTES TO THE FINANCIAL STATEMENTS OF THE BÊKOU TRUST FUND

1. NOTES TO THE BALANCE SHEET

NON-CURRENT ASSETS

1.1. PRE-FINANCING

EUR '000 Total 31.12.2015 Total 31.12.2014 Pre-financing 3 446 — Total 3 446 —





EUR '000 Total 31.12.2015 Total 31.12.2014 Direct Management 1 078 — Implemented by: Commission 1 078 — Indirect Management 2 368 — Implemented by: Public law bodies 1 155 — Private law bodies with a public service mission 1 213 — Total 3 446 —

CURRENT ASSETS

1.2. PRE-FINANCING

EUR '000 Total 31.12.2015 Total 31.12.2014 Pre-financing 14 860 — Cleared via cut-off (8 813 ) — Total 6 047 —





EUR '000 Total 31.12.2015 Total 31.12.2014 Direct Management 4 046 — Implemented by: Commission 4 046 — Indirect Management 2 002 — Implemented by: Public law bodies 806 — Private law bodies with a public service mission 1 196 — Total 6 047 —

1.3. EXCHANGE RECEIVABLES AND NON-EXCHANGE RECOVERABLES

This heading represents deferred management costs (EUR 1,3 million) and accrued income (kEUR 45).

1.4. CASH AND CASH EQUIVALENTS

Funds controlled by the Bêkou EU Trust Fund were presented in the 2014 annual accounts as receivables to the common central treasury system. With the aim of improving the presentation in the 2015 annual accounts, these funds were presented as cash and cash equivalents. The comparative figures for 2014 are disclosed accordingly.

NON-CURRENT LIABILITIES

1.5. FINANCIAL LIABILITIES

EUR '000 Contributions % Paid contributions Allocation of net results Financialliabilities European Commission 6 4 554 (588) 3 966 EDF 54 39 000 (5 033 ) 33 967 Member States: 39 28 000 (3 614 ) 24 386 Germany 15 000 (1 936 ) 13 064 France 10 000 (1 291 ) 8 709 Netherlands 2 000 (258) 1 742 Italy 1 000 (129) 871 Non-Member States: 1 925 (119) 806 Switzerland 925 (119) 806 Total 100 72 480 (9 354 ) 63 125

The total non-current financial liabilities relate to EUR 34 million of contributions from the European Development Fund, EUR 4 million from the European Commission via the EU Budget, EUR 24 million from various Member States and EUR 1 million from non-Member State.

The allocation of net results is only indicative and is made purely for accounting purposes. If the Bêkou Trust Fund is wound up, the final decision on the return of remaining funds will be made by the Trust Fund Board.

2. NOTES TO THE STATEMENT OF FINANCIAL PERFORMANCE

2.1. REVENUE FROM NON-EXCHANGE TRANSACTIONS

This heading represents contributions from donors recognised as operating revenue in line with the net expenses (3). Consequently the economic result of the year is nil.

2.2. OPERATING EXPENSES

EUR '000 2015 2014 Food aid/food security programmes 460 — Women's equality organisations and institutions 389 — Basic health care — basic and primary health care 6 678 — Urban development and management 539 — Reconstruction relief and rehabilitation 758 — Total 8 824 —





EUR '000 2015 2014 Direct Management 7 527 — Implemented by: Commission 7 527 — Indirect Management 1 297 — Implemented by: Public law bodies 539 — Private law bodies with a public service mission 758 — Total 8 824 —

2.3. OTHER EXPENSES

EUR '000 2015 2014 Other expenses 615 — Foreign exchange losses 16 — Total 631 —

This heading includes the Commission management costs (EUR 0,4 million), technical assistance (EUR 0,15 million), audit (EUR 0,05 million) and other costs.

3. OTHER SIGNIFICANT DISCLOSURES

3.1. Outstanding commitments not yet expensed

At 31 December 2015 the outstanding commitments not yet expensed amounted to EUR 12 million. The amount comprises the budgetary RAL (‘Reste à Liquider’) less related amounts that have been included as expenses in the 2015 statement of financial performance. The budgetary RAL is an amount representing the open commitments for which payments and/or de-commitments have not yet been made. This is the normal consequence of the existence of multi-annual programmes.

3.2. Related parties

The related party of the Bêkou EU Trust Fund is the European Development Fund. Transactions between these entities take place as part of the normal operations of the Bêkou EU Trust Fund and as this is the case, no specific disclosure requirements are necessary for these transactions in accordance with the EU accounting rules.

3.3. Events after reporting date

At the date of transmission of these accounts, no material issues had come to the attention of the Accounting Officer of the Bêkou EU Trust Fund or were reported to him that would require separate disclosure under this section. The annual accounts and related notes were prepared using the most recently available information and this is reflected in the information presented above.

4. FINANCIAL INSTRUMENTS DISCLOSURES

4.1. CURRENCY RISKS

Exposure of the Bêkou EU Trust Fund to currency risk at year end

At 31 December 2015 the ending balances of financial assets and financial liabilities did not include any material amounts quoted in different currencies than euro.

4.2. CREDIT RISK

The financial assets compose of cash and cash equivalent of EUR 52 million and receivables and recoverables that amounted to EUR 1,4 million at 31 December 2015.

Financial assets that are neither past due nor impaired

Receivables and recoverables are neither past due nor impaired.

Financial assets by risk category

The entire amount of EUR 52 million of cash and cash equivalents is placed in a bank with prime and high grade.

4.3. LIQUIDITY RISK

Maturity analysis of financial liabilities by remaining contractual maturity

The financial liabilities are entirely composed of liabilities to donors. They will be paid when the Bêkou EU Trust Fund is wound-up.

5. RECONCILIATION OF ECONOMIC RESULT AND BUDGET RESULT

The economic result of the year is calculated on the basis of accrual accounting principles. The budget result is however based on cash accounting rules. As the economic result and the budget result both cover the same underlying operational transactions, it is a useful control to ensure that they are reconcilable. The table below shows this reconciliation, highlighting the key reconciling amounts, split between revenue and expenditure items.

EUR '000 2015 ECONOMIC RESULT OF THE YEAR — Revenue Entitlements not affecting the budget result (9 455 ) Entitlements collected in current years 45 595 Accrued revenue (net) 40 Expenses Net effect of pre-financing (18 306 ) Accrued expenses (net) 7 703 BUDGET RESULT OF THE YEAR 25 577

CONSOLIDATED FINANCIAL STATEMENTS OF THE EDF AND THE BÊKOU TRUST FUND (13)

CONSOLIDATED BALANCE SHEET

EUR millions 31.12.2015 31.12.2014 NON-CURRENT ASSETS Pre-financing 520 472 520 472 CURRENT ASSETS Pre-financing 1 151 1 403 Receivables 172 84 Cash and cash equivalents 556 436 1 879 1 923 TOTAL ASSETS 2 399 2 395 NON-CURRENT LIABILITIES Provisions (4) Payables (39) (40) (43) (40) CURRENT LIABILITIES Payables (1 376 ) (1 423 ) (1 376 ) (1 423 ) TOTAL LIABILITIES (1 419 ) (1 463 ) NET ASSETS 980 932 FUNDS & RESERVES Called fund capital — active EDFs 38 873 35 673 Called fund capital from closed EDFs carried forward 2 252 2 252 Economic result carried forward from previous years (36 994 ) (33 468 ) Economic result of the year (3 152 ) (3 526 ) NET ASSETS 980 932

CONSOLIDATED STATEMENT OF FINANCIAL PERFORMANCE

EUR millions 2015 2014 OPERATING REVENUE 136 132 OPERATING EXPENSES Operating expenses (3 182 ) (3 650 ) Administrative expenses (114) (22) (3 296 ) (3 671 ) SURPLUS/(DEFICIT) FROM OPERATING ACTIVITIES (3 160 ) (3 539 ) Financial revenue 8 13 Financial charges (0) (0) SURPLUS/(DEFICIT) FROM FINANCIAL ACTIVITIES 8 13 ECONOMIC RESULT OF THE YEAR (3 152 ) (3 526 )

CONSOLIDATED CASH FLOW STATEMENT

EUR millions 2015 Economic result of the year (3 152 ) OPERATING ACTIVITIES Ordinary contributions from Member States 3 232 (Reversal of) impairment losses on receivables 1 (Increase)/decrease in pre-financing 204 (Increase)/decrease in current receivables (89) (Increase)/decrease in non-current liabilities 2 Increase/(decrease) in current liabilities (211) Increase/(decrease) in accrued charges and deferred income 132 NET CASHFLOW 120 Net increase/(decrease) in cash and cash equivalents 120 Cash and cash equivalents at the beginning of the year 436 Cash and cash equivalents at year-end 556

CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS

EUR millions Fund capital (A) Uncalled funds (B) Called fund capital (C) = (A)-(B) Cumulative Reserves (D) Other reserves (E) Total Net Assets (C)+(D)+(E) BALANCE AS AT 31.12.2013 45 691 13 162 32 529 (33 468 ) 2 252 1 313 Capital changes — (3 144 ) 3 144 — — 3 144 Economic result of the year — — — (3 526 ) — (3 526 ) BALANCE AS AT 31.12.2014 45 691 10 018 35 673 (36 994 ) 2 252 932 Capital changes 27 772 24 572 3 200 — — 3 200 Economic result of the year — — — (3 152 ) — (3 152 ) BALANCE AS AT 31.12.2015 73 464 34 590 38 873 (40 146 ) 2 252 980

EDF REPORT ON FINANCIAL IMPLEMENTATION

REPORT ON FINANCIAL IMPLEMENTATION — 2015

INTRODUCTORY NOTE

Previous EDFs

— As the Sixth EDF was closed in 2006 and the Seventh EDF was closed in 2008, the annual accounts no longer contain implementation tables for these EDFs. However, implementation of the transferred balances can be found in the Ninth EDF.

— As in past years, to ensure transparency in the presentation of the accounts for 2015, the tables set out separately for the Eighth EDF the part used for Lomé Convention programming and the part used for programming under the Cotonou Agreement.

— In accordance with article 1(2)(b) of the Internal Agreement of the Ninth EDF, balances and decommitments of previous EDFs have been transferred to the Ninth EDF, and, during the life of the Ninth EDF, have been committed as Ninth EDF funds.

10th EDF

The ACP-EC Partnership Agreement signed on 23 June 2000 in Cotonou by the Member States of the European Community and the States of Africa, the Caribbean and the Pacific (ACP States) entered into force on 1 April 2003. The Cotonou Agreement was amended twice, firstly by the agreement signed in Luxembourg on 25 June 2005, secondly by the agreement signed in Ouagadougou on 22 june 2010.

The EU Council Decision of 27 November 2001 (2001/822/EC) on the association of the overseas countries and territories (OCT) with the European Union entered into force on 2 December 2001. This Decision was amended on 19 March 2007 (Decision 2007/249/EC).

The Internal Agreement on the financing of Community aid under the multiannual financial framework for the period 2008-2013 in accordance with the revised Cotonou Agreement, adopted by the Representatives of the Governments of the Member States of the European Community on 17 July 2006, entered into force on 1 July 2008.

Under the Cotonou Agreement, the second period (2008-2013) of Community aid to the ACP States and OCTs is funded by the 10th EDF for an amount of EUR 22 682 million, of which:

— EUR 21 966 million is allocated to the ACP countries in accordance with the multiannual financial framework set out in Annex Ib to the revised Cotonou Agreement, of which EUR 20 466 million is managed by the European Commission;

— EUR 286 million is allocated to the OCTs in accordance with Annex IIAa of the revised Council Decision on the association of the OCTs with the European Community, of which EUR 256 million is managed by the European Commission;

— EUR 430 million is for the Commission to finance the costs arising from the programming and implementation of 10th EDF resources, in accordance with Article 6 of the Internal Agreement.

According to the ‘Sunset clause’ of the 10th EDF, (articles 1(4) and 1(5) of the 10th EDF Internal Agreement) no funds could be committed after 31 December 2013. Uncommitted funds were transferred to the 11th EDF performance reserve.

- Bridging Facility

The Internal Agreement establishing the eleventh European Development Fund (11th EDF) was signed by the Member States, meeting within the Council, in June 2013. It came into force on 1 March 2015.

In order to assure continuity between the end of the 10th EDF and the entry into force of the 11th EDF, the Commission proposed transitional measures, known as the ‘Bridging Facility’, to ensure availability of funds for cooperation with African, Caribbean and Pacific countries and with Overseas Countries and Territories, as well as for support expenditure.

The Bridging Facility was adopted on 12 December 2013 (Decision 2013/759/EU), enterred into force on 1 January 2014. The Bridging Facility and is financed from:

— funds decommitted from Eighth and Ninth EDF up to 31/12/2013,

— uncommitted balances from the 10th EDF at 31/12/2013,

— funds decommitted from the 10th and previous EDFs as from 01/01/2014 until 28/02/2015.

By the entry into force of the 11th EDF, a total of EUR 1 630 million had been de-committed from former EDF's and were therefore potentially available to the Bridging Facility, of which EUR 1 595 million were allocated and are accounted for under the 11th EDF, and EUR 4 million remained unallocated on the Bridging Facility and returned to the original performance reserve.

11th EDF

The ACP-EC Partnership Agreement signed on 23 June 2000 in Cotonou by the Member States of the European Community and the States of Africa, the Caribbean and the Pacific (ACP States) entered into force on 1 April 2003. The Cotonou Agreement was amended twice, firstly by the agreement signed in Luxembourg on 25 June 2005, secondly by the agreement signed in Ouagadougou on 22 June 2010.

The EU Council Decision of 27 November 2001 (2001/822/EC) on the association of the overseas countries and territories (OCT) with the European Union entered into force on 2 December 2001. This Decision was amended on 19 March 2007 (Decision 2007/249/EC).

The Internal Agreement on the financing of Community aid under the multiannual financial framework for the period 2014-2020 in accordance with the revised Cotonou Agreement, adopted by the Representatives of the Governments of the Member States of the European Community on August 2013, entered into force on March 2015.

Under the Cotonou Agreement, the third period (2014-2020) of Community aid to the ACP States and OCTs is funded by the 11th EDF for an amount of EUR 30 506 million, of which:

— EUR 29 089 million is allocated to the ACP countries in accordance with Article 1.2(a) and Article 2(d) of the Internal Agreement, of which EUR 27 955 million is managed by the European Commission;

— EUR 364,5 million is allocated to the OCTs in accordance with Article 1.2(a) and Article 3.1 of the Internal Agreement, of which 359,5 million is managed by the European Commission;

— EUR 1 052,5 million is for the Commission to finance the costs arising from the programming and implementation of 11th EDF resources, in accordance with Article 1.2(a) of the Internal Agreement.

- Remaining funds on non-mobilisable performance reserves at 31.12.2015

Until the coming into force of the Bridging Facility on 1 January 2014, the amounts decommitted from projects under the Ninth and previous EDFs were transferred to the performance reserve of the 10th EDF. On 1 January 2014 the uncommited funds of the 10th EDF were transferred to the performance reserve of the 11th EDF, with the exception of Stabex funds and administrative envelope.

During 2015 all decommitted funds from previous EDFs were transferred to the respective reserves.

In accordance with article 1.4 of the 10th EDF Internal Agreement, and the Council Decision of 12 December 2013 (2013/759/EU) those funds were allocated to the Bridging Facility.

EUR millions Total available on non-mobilisable performance reserves at 31/12/2013 938 Total made available on non-mobilisable performance reserves during 2014 661 Less total transferred to the Bridging facility (1 597 ) Non-mobilisable performance reserve not transferred to BF at 31/12/2014 2

- 11th EDF Stabex reserve

Following the closure of Stabex accounts, unused/decommitted funds are transferred to the 11th EDF Stabex A Envelope reserve (10th EDF Internal Agreement Art. 1(4)) and then to the national indicative programmes of the countries concerned.

- 10th EDF Co-financings

Under the 10th and 11th EDF, transfer agreements for co-financings from Member States were signed, and commitment appropriations were opened for a total amount of EUR 204,6 million, while payment appropriations were opened for the cashed amounts totalling EUR 184,9 million.

The situation of co-financing appropriations at 31.12.2015 is shown in the table below:

EUR millions Commitments appropriations Payment appropriations Co-financing — A Envelope 186,1 166,8 Co-financing — Intra ACP 13,4 13,4 Co-financing — Administrative expenses 5,1 4,7 204,6 184,9

The following tables, concerning the amounts decided, contracted and paid, show net figures. The tables presenting the situation by instrument are annexed.

Table 1.1

8th EDF

EVOLUTION OF APPROPRIATIONS: 31 December 2015

ANALYSIS OF CREDITS PER INSTRUMENT

(EUR million) INSTRUMENT INITIAL APPROPRIATION INCREASES/DECREASES IN CUMULATIVE RESOURCES AT 31 DECEMBER 2014 INCREASE OR DECREASE IN RESOURCES IN 2015 Notes CURRENT LEVEL APPROPRIATION ACP Lomé Regular MS Contributions 12 967 (3 252 ) (4) 9 711 Aid for refugees 120 (20) 100 Emergency aid (Lomé) 140 (4) 136 Heavily indebted poor countries (Lomé) 0 1 060 1 060 Interest-rate subsidies 370 (291) 79 Risk capital 1 000 16 1 016 Stabex 1 800 (1 077 ) 723 Structural adjustment 1 400 97 1 497 Sysmin 575 (474) 101 Total indicative programmes 7 562 (2 595 ) (4) (4) 4 963 Utilisation of interest income 0 35 35 Cotonou Regular MS Contributions 0 654 654 A Envelope — National Allocations 0 418 418 B Envelope — National Allocations 0 237 237 Interests and other receipts 0 0 0 SUB TOTAL ACP 12 967 (2 598 ) (4) 10 365 OCT Lomé Regular MS Contributions 163 (115) (2) 47 Interest-rate subsidies 9 (8) 1 Risk capital 30 (24) 6 Stabex 6 (5) 1 Sysmin 3 (1) 2 Total indicative programmes 115 (78) (2) (4) 36 SUB TOTAL OCT 163 (115) (2) 47 TOTAL 8th EDF 13 130 (2 713 ) (6) 10 412

Table 1.2

9th EDF

EVOLUTION OF APPROPRIATIONS: 31 December 2015

ANALYSIS OF CREDITS PER INSTRUMENT

(EUR million) INSTRUMENT INITIAL APPROPRIATION INCREASES/DECREASES IN CUMULATIVE RESOURCES AT 31 DECEMBER 2014 INCREASE OR DECREASE IN RESOURCES IN 2015 Notes CURRENT LEVEL APPROPRIATION ACP Lomé Regular MS Contributions 0 700 (11) 689 Transfers from 6th EDF — Lomé 0 20 (0) (5) 20 Transfers from 7th EDF — Lomé 0 679 (11) (5) 668 Cotonou Regular MS Contributions 8 919 5 820 (93) 14 646 A Envelope — National Allocations 5 318 3 428 (30) (5) 8 716 B Envelope — National Allocations 2 108 (876) (4) (5) 1 227 CDE, CTA and Parliamentary Assembly 164 (10) 154 Implementation costs 125 53 (1) (6)+ (7) 177 Interests and other receipts 0 63 (0) 63 Other Intra-ACP allocations 300 2 363 (34) (5) 2 629 Peace facility 0 362 (1) (5) 360 Regional allocations 904 (83) (22) (5) 799 Special allocation R.D. Congo 0 105 105 Special allocation South Sudan 0 267 (7) 267 Special allocation Sudan 0 110 (6) 110 Voluntary contribution Peace facility 0 39 39 SUB TOTAL ACP 8 919 6 520 (104) 15 334 OCT Lomé Regular MS Contributions 0 3 3 Transfers from 6th EDF — Lomé 0 0 0 Transfers from 7th EDF — Lomé 0 3 3 Cotonou Regular MS Contributions 10 287 (5) 292 A Envelope — National Allocations 0 244 (4) (5) 239 B Envelope — National Allocations 0 4 4 Regional allocations 8 40 (0) (5) 48 Studies/Technical assistance OCT 2 (1) 1 SUB TOTAL OCT 10 290 (5) 295 TOTAL 9th EDF 8 929 6 810 (109) 15 630

Table 1.3

10th EDF

EVOLUTION OF APPROPRIATIONS: 31 December 2015

ANALYSIS OF CREDITS PER INSTRUMENT

(EUR million) INSTRUMENT INITIAL APPR