Provisional annual accounts for the financial year 2004 of the 6th, 7th, 8th and 9th European Development Funds
Date: 2005-04-29
Institutions: European Commission
Subjects: European Development Fund, budget estimate, financial year

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 29.4.2005 
COM(2005) 174 final 

Provisional annual accounts for the financial year 2004 of the 6th, 7th, 8th and 9th 
European Development Funds  

(presented by the Commission) 

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Article  96  of  the  Financial  Regulation  applicable  to  the  9th  European  Development  Fund 
states  that  the  Commission  draws  up  the  accounts  of  the  EDF  describing  the  financial 
situation of the Fund as at 31 December of the preceding year. The EDF Accounts comprise 
the financial statements, the reports on financial implementation and the financial statements 
and the information supplied by the European Investment Bank (EIB). 

The accounts must be accurate and comprehensive and present a true and fair view: 

(i)  as  regards  the  financial  statements,  of  the  assets  and  liabilities,  charges  and  income, 
entitlements and obligations not shown as assets or liabilities, and cash flow; 

(ii)  as  regards  the  reports  on  financial  implementation,  of  the  revenue  and  expenditure 
operations from EDF resources. 

Moreover  the  financial  statements  shall  be  drawn  up  in  accordance  with  generally  accepted 
accounting principles, namely: 

(a) going concern basis; 

(b) prudence; 

(c) consistent accounting methods; 

(d) comparability of information; 

(e) materiality; 

(f) no netting; 

(g) reality over appearance; 

(h) accrual-based accounting. 

The financial statements are prepared by the accounting officer and presented in millions of 
euro.  The  annex  to  the  financial  statements  supplements  and  comments  the  information 
presented  in  the  statements  and  contains  notes  indicating  which  accounting  principles  were 
applied in the preparation and presentation of the accounts. 

The  outturn  of  the  European  Development  Funds  for  the  Financial  Year  2004  can  be 
summarised as follows; 

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1. FUNDS MANAGED BY THE EUROPEAN COMMISSION 

(€ million) 

Consolidated balance sheet of the 6th, 7th, 8th and 9th EDFs as at 31 December 2004 

2004 

2003 

 ASSETS 

 Long term assets 

 Contributions 

 Initial allocation 

 40.390,15   

  40.035,15   

 EIB special contribution 

       60,00   

        60,00   

 less: amounts called up 

- 23.240,00   

- 20.820,00   

 17.210,15   

  19.275,15   

 Amounts called up 

 23.240,00   

  20.820,00    

 less: payments received 

- 23.197,62   

- 20.724,23    

       42,38   

        95,77   

 Stabex contributions 

 Initial allocation 

   1.800,00   

 less: amounts called up and received 

-   1.800,00   

    1.800,00   

-   1.800,00   

 Net contributions receivable 

 17.252,53   

  19.370,92   

             -      

             -   

 Current assets 

 Debtors 

25,78   

26,27 

 Short-term investments 

             -   

          3,15   

 Deferred expenditure 

     537,00   

      427,82   

 Cash at bank 

     798,88   

      526,16   

 Total assets 

  18.614,19 

  20.354,32   

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 LIABILITIES  

 Fund capital  

 Contributions  

 EIB special contribution  

 Stabex contributions  

 40.390,15     

  40.035,15   

       60,00     

        60,00   

   1.800,00     

    1.800,00   

 42.250,15     

  41.895,15   

 Total inter-fund transfers  

     848,74     

      848,74   

 43.098,89     

  42.743,89   

 Capitalised income  

     704,68     

      689,00   

 Total Fund capital  

 43.803,57     

  43.432,71   

 Other sources of funds  

 Payments  

 Recoveries  

- 25.913,69     

- 23.504,12   

        18,18     

9,76 

 Transactions to be finalised  

-       11,24     

-       10,80   

 Doubtful debt provisions  

-         0,03     

-         2,76   

 Creditors  

     717,40     

      429,35   

             -     

  Total liabilities  

  18.614,19     

20.354,32 

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The following points should be noted in relation to this table: 

•  The “initial allocation” represents the total amount receivable from the Member States 
for the relevant EDF fund as laid down in the internal agreement between the Member 
States  and  the  beneficiary  African,  Caribbean  and  Pacific  (ACP)  States  and  the 
Overseas Countries and Territories (OCT). 

•  The initial allocation for the (current) 9th EDF, which originally totalled € 10.555,15 
million has since been increased by an amount of € 105 million, which was released 
by the EIB in accordance with the provisions of Council Decision 2003/583/EC. This 
additional  allocation  is  in  favour  of  actions  to  be  undertaken  in  the  Democratic 
Republic of the Congo. 

•  A further € 250 million was taken from the € 1.000 million reserve (Article 2(2) of the 
Internal  Agreement  for  the  9th  EDF)  following  the  adoption  of  Council  Decision 
2004/289/CE in order to establish a water facility. 

•  No  financial  contributions  have  yet  been  called  in  from  the  9th  Fund,  with  the  sole 
exception  of  the  €  105  million  in  favour  of  the  Democratic  Republic  of  the  Congo 
referred to above. 

EDF contributions are paid into EDF Treasury accounts (accounts held with the central banks 
of  the  Member  States).  In  accordance  with  the  provisions  of  Article  40(4)  of  the  Financial 
Regulation interest is charged to the Member States in the event of late payment of the called-
up contributions. 

From  the  EDF  Treasury  accounts  the  Accounting  Officer  makes  a  series  of  transfers  to  the 
EUR paying agents -accounts with commercial banks established in the Member States used 
for  (i)  payments  to  beneficiaries  within  the  Union  and  (ii)  for  transfers  to  the  ACP  paying 
agents -bank accounts held within the ACP States. The latter are used for making payments in 
local currency within the beneficiary State. 

Interest earned on accounts  with  European paying agents can be used to  finance projects in 
accordance  with  Articles  1.3  and  10  of  the  Internal  Agreement.  In  2004  a  total  amount  of 
€6,57 million was earned, including the interest on late (Member State) contributions.  

The  figure  shown  for  recoveries  (€  18,18  million)  represents  the  value  of  recovery  orders 
issued  but  unpaid  at  the  year  end.  During  2004,  recovery  order  files  closed  amounted  to 
€40,34 million. Of this total, an amount of € 970.161,53 was written off by the Authorising 
Officer  during  the  year  and  an  amount  of  €  3.169.860,39  was  recovered  by  the  Accounting 
Officer by way of offsetting, in accordance with the provisions of Article 46 of the 9th EDF 
Financial Regulation. 

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2. Funds managed by the European Investment Bank (EIB) 

INVESTMENT FACILITY 

BALANCE SHEET AS AT 31 DECEMBER 2004  

(€ million) 

31.12.2004

31.12.2003

Loans and advances to credit institutions 

Shares and other variable-yield securities 

Subscribed capital unpaid 

98,26 

11,79 

60,00 

TOTAL ASSETS 

170,50 

67,47 

3,70 

133,49 

204,65 

TIES 

Facility Capital 

164,65 

205,00 

Prifit / Loss for the financial year  

5,85 

TOTAL LIABILITIES 

170,50 

-0,35 

204,65 

The Investment Facility was established within the framework of the Cotonou Agreement. It 
is is managed by the European Investment Bank. Under the terms of the Agreement up to € 
2.200 million may be allocated to finance the Facility. Within the framework of the Cotonou 
Agreement, The EIB also manages loans granted from its own resources. All other financial 
resources and instruments are administered by the European Commission. 

The  summary  financial  data  only  covers  the  operations  of  the  Investment  Facility.  Under 
Council  Decision  of  8  April  2003,  the  Member  States  agreed  to  cover  in  full  the  expenses 
incurred by the Bank for the management of the Facility. Interest on bank deposits placed by 
the Facility with the EIB is not accounted for here, as such interest is payable directly to the 
European Commission. 

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