FINAL ACCOUNTS & BUDGETARY IMPLEMENTATION REPORT OF THE CLEAN SKY JOINT UNDERTAKING

Transcription

1 FINAL ACCOUNTS & BUDGETARY IMPLEMENTATION REPORT OF THE CLEAN SKY JOINT UNDERTAKING FOR THE YEAR

2 CONTENTS Contents... 2 Introduction and Context of the FINAL Accounts Financial Statements Balance Sheet Economic outturn account Statement of changes in net assets Cash Flow Analysis Notes to the Financial Statements Accounting Principles Accounting Rules Assets Net assets and liabilities Notes to the Balance Sheet Non-current assets Current assets Net Assets Current liabilities Notes to the Economic Outturn Account Revenues Operational expenses Operating Expenses Financial Income and Expenses Report on Budgetary Implementation Introduction Budgetary principles Management information systems Annual Budget Plan (ABP) ABP Revenue ABP Expenditure Budgetary implementation TITLE I TITLE II TITLE III Title IV Budget Implementation Tables Budgetary Outturn Account Notes to the Budgetary Outturn Reconciliation of Economic and Budget Outturn Notes to the Reconciliation of Economic and Budgetary Outturn Budgetary execution Budgetary Revenue

3 4.3.2 Budgetary Expenditure Summary Certificate of the Accounting Officer

4 INTRODUCTION AND CONTEXT OF THE FINAL ACCOUNTS 2011 The Clean Sky Joint Undertaking (CSJU) is an independent legal entity, set up as publicprivate partnership by Council Regulation (EC) No 71/2007 dated 20 th December 2007 for the period up to 31 st December The objectives of the CSJU are to contribute to the implementation of the Seventh Framework Programme, in particular Theme 7, Transport (including Aeronautics) of the Specific Programme Cooperation. Founding members of the CSJU are the pean Community, represented by the Commission, and 12 designated ITD leaders and their Associates. The maximum Community contribution to the CSJU covering running costs and research activities is 800 Mio. Other members of the JU need to contribute resources at least equal to the Community contribution, excluding those allocated through calls for proposals, where special provisions exist. The contributions provided by the other members of the JU have to be registered in the financial reports of the JU. The financial reporting of the CSJU is governed by the provisions of the CS Financial Rules, which take into account the particular needs to combine public and private funding. The CS Annual Accounts comprise of the financial statements of the JU and the reports on implementation of the budget. The Final Accounts 2011 cover the period 1 st January to 31 st December They incorporate the audit results of the pean Court of Auditors on the Provisional Accounts 2011, which were prepared up to 10 th February Subsequent events, occurring between the Provisional and Final Accounts, which have a significant impact on the financial statements, are reflected in the Final Accounts. In particular, the validation of the in-kind contribution provided by members of the JU (industry and research organisations) through the CS Governing Board is reflected in the Net Assets of the CS JU. As the validation process has been significantly delayed in the beginning of 2012 due to an exceptionally late receipt of cost claims from members, the Net Assets show a negative balance in the Final Accounts for the year Detailed explanations are provided in the related section of the Notes to the accounts (section 2.3.3, page 23). For the Final Accounts the estimates for costs of 2011 projects have been revised based on the actual cost claims received. Furthermore, new events relating to the likely results of ex-post audits have been considered within the Contingent Assets and Provisions of these Accounts. 4

5 1 FINANCIAL STATEMENTS 1.1 Balance Sheet BALANCE SHEET - ASSETS 31/12/ /12/2010 A. NON CURRENT ASSETS Tangible fixed assets (net) , , Intangible fixed assets (net) , TOTAL NON-CURRENT ASSETS 77, , B. CURRENT ASSETS Short-term pre-financing 10,817, ,442, Short-term pre-financing Clean Sky JU - members Short-term pre-financing Clean Sky JU - partners 10,817, ,442, Short-term receivables 3,584, ,174, Short term receivables recoveries from members 1,553, ,502, Short term receivables - contribution from 1,801, ,526, members for Running Costs Other receivables 228, , Cash and cash equivalents ,706, ,675, TOTAL CURRENT ASSETS 65,108, ,293, TOTAL ASSETS 65,185, ,299,

6 BALANCE SHEET - LIABILITIES 31/12/ /12/2010 C. NET ASSETS Contributions received from Members (EC & industry) 296,989, ,770, Contributions in kind received from Members (Industry) ,873, ,339, Contributions used during previous years (249,656,788.01) (879,438.54) Contributions used during the year (EOA) (199,704,408.52) (248,777,349.47) TOTAL NET ASSETS (18,498,610.78) 21,453, D. CURRENT LIABILITIES Members contribution to be validated ,423, ,122, Accounts payable 10,683, ,723, Amounts payable - consolidated entities 1, Amounts payable beneficiaries 883, Amounts payable suppliers 64, , Amounts payable staff 1, Other payables Accrued charges - operating costs 569, , Accrued operational expense 9,163, ,207, Provision for risks and charges - short term Provision for risks and charges - short term , , TOTAL CURRENT LIABILITIES 83,684, ,846, TOTAL LIABILITIES 65,185, ,299,

7 1.2 Economic outturn account ECONOMIC OUTTURN ACCOUNT Ref REVENUES OPERATIONAL REVENUES Other revenue - reversal of claims previously expensed ,337, TOTAL OPERATIONAL REVENUES 2,337, OPERATIONAL EXPENSES Operational expenses funded by CSJU in cash ,193, ,640, Operational expenses contributed in kind by members 89,003, ,462, TOTAL OPERATIONAL EXPENSES 198,196, ,102, OPERATING EXPENSES Administrative expenses Staff expenses 2,319, ,045, Depreciation & amortisation of fixed assets 14, Rent of building 302, , Rent of furniture 1, , Office suppliers & maintenance 54, , Communication & publications 390, , Transport expenses , , Recruitment costs 2, , Training costs 46, , Missions 161, , Experts and related expenditures 796, , IT costs - external service 101, , Other external service provider 381, , Total administrative expenses 4,575, ,460, Other operating expenses Exchange losses Total other operating expenses TOTAL OPERATING EXPENSES 4,575, ,461, OPERATING RESULT 200,435, ,564, FINANCIAL INCOME Bank interest on pre-financing from EU 604, , Interest on late payment (income) 29, Interests on pre-financing given to Members 96, Total financial income 730, , FINANCIAL EXPENSES Financial expenses Total financial expenses FINANCIAL RESULT 730, , ECONOMIC RESULT OF THE YEAR 199,704, ,777,

8 1.3 Statement of changes in net assets 2011 Changes in Net Assets and Liabilities Net Assets Balance as of 31 st December 2010 EURO EURO 21,453, Contributions received from members during the year 2011: EC 117,000, Other members 2,219, Contributions in kind from 2008, 2009, 2010 and ,533, from members approved in 2011 (other members) Total contributions in ,752, Economic Outturn for 2011 (199,704,408.52) Balance as of 31 st December 2011 (18,498,610.79) 8

9 1.4 Cash Flow Analysis Cash Flow from ordinary activities Details Subtotals Totals Final Total EURO Economic result of the year 2011 (199,704,408.52) Operating activities: (Increase) / decrease in short-term prefinancing (Increase) / decrease in short-term receivables (6,374,804.51) (409,287.17) Increase / (decrease) in provision 577, Increase / (decrease) in payables & accruals (4,040,188.68) Financial expenses 8.87 Depreciation & amortisation 14, (10,232,002.96) Net cash flow from operating activities (209,936,411.48) Investing activities Acquisitions of fixed assets (86,587.69) Net cash flow from investing activities (86,587.69) Financing activities Cash contributions: In cash contribution from members (running costs) In cash contribution from EU (running and operational costs) 2,219, ,000, In-kind contributions In kind expense contribution from members 89,003, Reduction in members' contributions due to rejected claims (1,168,773.95) Other financing activities Financial Expenses (8.87) 119,219, ,834, (8.87) Net cash flow from financing activities 207,053, Net cash flow from operating, investing and financing activities Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period (2,969,523.81) 53,675, ,706,

10 2 NOTES TO THE FINANCIAL STATEMENTS The accounting principles and policies of the CSJU are described in the Clean Sky Joint Undertaking Accounting Policies 1. These principles are based on the Financial Rules of the CSJU, which are in line with Council Regulations (EC, Euratom) No 2343/2002 and No. 652/2008 ("Framework Financial Regulation"). The financial statements of the Clean Sky Joint Undertaking 2011 provide information about the financial position as of 31 st December 2011 (Balance sheet), the financial performance during the accounting period 1 st January to 31 st December 2011 (Economic outturn account) and the development of the accumulated contribution from the JU's members during the year 2011 (Statement of changes in net assets and liabilities). 2.1 Accounting Principles The accounting system of the Clean Sky Joint Undertaking consists of budgetary accounts and general financial accounts. The budgetary accounts present the implementation of the budget on a cash basis. The general financial accounts record in chronological order all events and operations which affect the economic situation of the Clean Sky Joint Undertaking and give the complete picture of the financial transactions during the financial year applying the accrual accounting method. The annual financial statements at the end of the year are prepared on the accrual based accounting method. The accounting principles that have been applied in drawing up the financial statements 2011 are: True and fair presentation Accrual basis Reliability Going concern Comparability and consistency of information Aggregation Off-setting Relevance Ed. 4,

11 Currency: The functional currency for the Accounts of the Clean Sky Joint Undertaking is the (, EUR). 2.2 Accounting Rules The accounting rules applied by the Clean Sky Joint Undertaking allow for consolidation with the accounts of the EC institutions. The Financial Statements 2011 comply with the annual accountancy provisions for 2011 adopted by the Accounting Officer of the Commission in accordance with the General Financial Regulation Art. 133 and 185, and the Financial Rules of the CSJU Assets Tangible fixed assets Property and equipment are stated at historical cost less depreciation, and impairment. Historic cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent cost 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 associated with the item will flow to the Clean Sky Joint Undertaking and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the economic outturn account during the financial period in which they are incurred. Intangible fixed assets Computer Software An item is recognised as an intangible if it meets the definition of an intangible asset, it is probable that future economic benefits and/or service potential will flow to the Clean Sky Joint Undertaking and the cost of the asset can be reliably measured. Computer software is carried at cost less accumulated amortisation and impairment losses. Costs incurred in acquiring software and licenses that will contribute to future period financial benefits through revenue generation and/or service potential are capitalised to software. Costs capitalised include external direct costs of materials. All other repairs and maintenance are charged to economic outturn account during the financial period in which they are incurred. 11

12 Depreciation and Amortisation rates Depreciation and amortisation on tangible and intangible 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 Type of asset Straight line depreciation rate Intangible assets Computer software 25% Plant machinery and equipment 12.5% to 25% Furniture 10% to 25% Fixtures and fittings 12.5% to 25% Computer hardware 25% The assets residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. An asset s carrying amount is written down immediately, when it is higher than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the economic outturn account. Pre-financing Pre-financing made to beneficiaries of grants remains the property of the JU until the final payment. It is therefore shown in the Balance sheet under current assets. Under EC Accounting Rules, and in the preparation of these Accounts, the pre-financing balances are reduced at the year-end to the extent that costs relating project execution for each individual project have been accrued. Where the executed project costs exceed the prefinancing reported on the balance sheet, a further accrual is recognised within the liabilities of the Accounts. In the assets of the JU only the net amounts of the pre-financing is included - gross amounts and related accruals are presented in the notes to the accounts. Pre-financing is legally cleared between the JU and recipient on approval of the final payment. 12

13 Receivables Receivables are evaluated at their liquidated value. No provision for doubtful account is established for transactions between pean institutions and bodies (consolidated entities). Contingent assets A contingent asset is a possible asset that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the CS JU. The CS JU does not recognise contingent assets but discloses its existence where inflows of economic benefits or service potential are probable, but not virtually certain Net assets and liabilities Net assets Net assets are the residual of assets and liabilities and comprise of accumulated contributions received from the members of the JU (EC and industry) less the accumulated contributions used. The contributions include funds received by the JU in-cash and contributions provided by the members to the funded projects in-kind. The net assets also contain reserves, if applicable. Members' contributions In-cash contribution: According to the notes of the Accounting Officer of the Commission (ARES (2010) and ARES (2009)366251, Annex 2), subsidies and contributions that the JU receives from the pean Communities and other members are considered as investments of the members. They are not recognised in the financial statements of the JU as income from grants, but are treated as contributions from owners and are shown in the Net Assets of the JU as Contribution received from Members (EC and industry). In-cash contributions comprise of funds for operational expenses of the JU as well as for its running costs. In-kind contributions: In-kind contributions are provided by CS members through the execution of projects. To the extent that project costs are born by the members and not funded in cash by the JU, members contribute in-kind to the CS programme. According to the provisions of the Grant Agreements for members (GAMs) the minimum for the in-kind contribution should represent 13

14 50% of the CS programme. The contributions are subject to evaluation and acceptance by the CS Governing Board. The in-kind contributions are reflected in the annual accounts of the JU at the end of the year. Contributions related to transmitted cost claims validated by the CS management or calculated on the basis of estimates, are shown in the liabilities of the JU as Contribution from members to be validated. The related operational expense is included in the EOA and therefore appears in the Contributions used during the year (EOA). After approval of the in-kind contributions by the Governing Board the contributions are shifted from the liabilities to the net assets as Contributions received from members. Provisions The Clean Sky JU makes provisions for liabilities of uncertain timing or amounts. Provisions are recognised in the accounts of the CSJU as liabilities, if they represent present obligations of the JU and can be estimated reliably. A future outflow of resources must be probable for settling the obligations. Provisions are distinguished from other liabilities, such as payables or accruals, because there is uncertainty about the timing and amounts of future expenditure required in settlement. Contingent liabilities A contingent liability is not recognised in the accounts of the CSJU but is described in the notes to the accounts for information purposes. A liability is contingent, when it represents an obligation for the JU arising from past events and when its existence has to be confirmed still by the occurrence of uncertain future events, not wholly within the control of the CSJU. Furthermore, a contingent liability is assumed, when a present obligation of the JU, which arises from past events, cannot be recognised as provision, because an outflow of resources is not probable or the amount of the obligation cannot be estimated reliably. 14

15 2.3 Notes to the Balance Sheet BALANCE SHEET ASSETS Non-current assets Tangible fixed assets: In 2011, the JU acquired 6 laptops, 1 beamer, 1 sound station, computer hardware and office furniture, and also upgraded the digital and networking connections Intangible fixed assets: The JU acquired software licenses in 2011 which support the core IT infrastructure. 15

16 Tangible fixed assets analysis: Acquisition Costs Depreciation Residual value Category of Assets Opening balance at cost as of 01/01/2011 Additions in 2011 Disposals in 2011 Ending balance cost as of 31/12/2011 Opening depreciation as at 01/01/11 Depreciation charge for 2011 Disposals in 2011 Closing accumulated depreciation as of 31/12/2011 Balance as of 31/12/2011 Plant, machinery and equipment 1.229, , ,08 332,93 771, , ,75 Computer Hardware 4.817, , ,47 135, , , ,87 Furniture and Fixtures , , , , ,76 Total Tangible Assets 6.046, , ,58 468, , , ,39 Intangible fixed asset analysis: Acquisition Costs Amortisation Residual value Category of Assets Opening balance at cost as of 01/01/2011 Additions in 2011 Disposals in 2011 Ending balance cost as of 31/12/2011 Opening amortisation as at 01/01/11 Amortisation charge for 2011 Disposals in 2011 Closing accumulated depreciation as of 31/12/2011 Balance as of 31/12/2011 Software , , , , ,75 Total Intangible Assets , , , , ,75 16

17 2.3.2 Current assets Short-term pre-financing Short-term receivables pre-financing 10,817, ,442, Analysis of net pre-financing as of Balance as of 01/01/2011 Pre-financing used in 2011 through execution of projects (validation of cost claims of years 2008, 2009 and 2010) Pre-financing recovered or reflected under receivables of the JU for projects starting 2008, 2009 and 2010 Pre-financing paid by the JU for Grant Agreements 2011 Pre-financing cleared or recovered during the year through validation of cost claims for projects starting 2011 Pre-financing to reflected under receivables of the JU for 2011 Projects Total amount of pre-financing before accrual as of Accrual of operational expense against pre-financing for project execution in 2011 Net prefinancing as of 31/12/2011 Members ,949, (740,923.30) 81,208, (81,208,359.90) 0.00 Partners 4,442, (1,340,873.78) (31,200.00) 23,295, ,366, (15,548,850.30) 10,817, Total 4,442, (1,340,873.78) (31,200.00) 105,245, (740,923.30) 107,574, (96,757,210.20) 10,817,

18 Analysis of net pre-financing as of Balance as of 01/01/2010 Pre-financing used in 2010 through execution of projects (validation of cost claims of years 2008 and 2009) Pre-financing recovered or reflected under receivables of the JU Pre-financing paid by the JU for Grant Agreements 2010 Pre-financing 2010 cleared or recovered during the year through validation of cost claims Pre-financing recovered or reflected under receivables of the JU for 2010 Projects Total amount of pre-financing before accrual as of Accrual of operational expense against pre-financing for project execution in 2010 Net prefinancing as of 31/12/2010 Members 70,059, (46,343,859.58) (23,715,893.62) 60,535, ,535, (60,535,441.03) 0.00 Partners ,996, ,996, (6,554,045.81) 4,442, Total 70,059, (46,343,859.58) (23,715,893.62) 71,532, ,532, (67,089,486.84) 4,442,

19 In the year 2011 an amount of 1,502, pre-financing pertaining to Grant Agreements for members (GAMs) from the years 2008 and 2009 has been recovered following the validation of related costs claimed by the beneficiaries (2010: ). At 31 December 2011, 740, (2010: 1,502,239.70) was outstanding for recovery and included in the receivables of the JU for projects executed in 2011 where project costs are anticipated to be lower than the pre-financing received. This amount has been determined using actual cost claims provided by GAMs (with a small number of estimates) for the preparation of the 2011 Final Accounts. New pre-financing has been provided in 2011 for projects funded by Grant Agreements with members and with partners carried out in In line with the CS accounting policies, prefinancing has been accrued at the year-end for the presentation in the Final Accounts according to the execution of the funded projects. Projects managed through the GAMs lasted from 1 st January 2011 to 31 st December Based on actual cost claims provided by GAMs (with a small number of estimates), the related operational expenditure for the year 2011 has been reflected in the Economic Outturn Account of the JU and the recovery of unused pre-financing has been accounted for as a receivable. The balance of the net pre-financing related to GAMs after having accounted for the accrual is therefore -0- (2010: -0-). Projects managed through Grant Agreements for Partners (GAPs) last for different periods, which often deviate from the calendar year. Operational expense relating to the year 2011 has been recognised by taking into account validated cost claims for applicable projects and periods. The remaining costs have been accrued assuming a pro-rata temporis execution of the projects. The final amount of 10.8 Mio. (2010: 4.4 Mio.) represents the net prefinancing, which will be allocated to the project execution in

20 Short-term receivables Short-term receivables pre-financing 1,553, ,502, Receivable due from members related to prefinancing of GAMs , Receivable due from members related to prefinancing of GAMs 2008 and ,502, Negative adjustments received in 2011 for GAMs 2008, 2009 and 2010 requiring repayment by members 812, ,553, ,502, Short-term receivables contribution from members 1,801, ,526, Outstanding amount of the contributions from members to the JU's running costs for the years 2009, 2010 and Running costs for ,646,431 0 Running Costs ,436 1,526,145 1,801,867 1,526,145 Other Receivables 228, , Accrued bank interest income on the in-cash contribution received from the Commission for the period December 2011, and for interest receivable that members have declared on pre-financing received from the CS JU (see note ). Accrued bank interest for December , ,600 Interest receivable declared by members for , , ,600 20

21 Cash and cash equivalents Cash and cash equivalents 50,706, ,675, The amount of 50,706, represents the final balance of the two bank accounts of the CSJU as of 31st December Contingent Assets Contingent Assets 1,993, , Potential recovery of costs from members resulting from ex-post audits 1,421, Ineligible cost claims under investigation by CS JU 572, , Potential recoveries of costs from members resulting from ex-post audits 1,993, , In 2011, the JU commissioned a number of ex-post audits of cost claims relating to GAMs 2008, 2009, and As at the date of preparation of the Final Accounts 2011, the results of these audits had yet to be formally finalised, however in a number of cases the auditors noted adjustments in favour of the CS JU where the original amount of the claim had previously been validated by the CS JU. The CS JU has therefore considered it more probable than not that these amounts will be repayable to the CS JU by these members as a result of the ex-post audits. As these audits have yet to be formally finalised, and management has not yet issued formal recovery orders for these amounts, an asset has not been recognised in the Final Accounts 2011 as the inflows of economic benefit are not yet virtually certain. The amounts involved are however deemed to be reliably measurable by the CS JU, and the flow of economic benefits to the CS JU is judged by management to be probable, and therefore a Contingent Asset has been disclosed for these amounts. 21

22 The total amount of the adjustments in favour of the CS JU was 2,842,417, of which the JU in-cash contribution represents 50%, with the remaining 50% accounted for as an in-kind contribution from members. The contingent asset disclosed above by the CS JU thus represents the 1,421, recoverable in cash from the members. On finalisation of these audits in 2012, the appropriate accounting treatment will be considered for the 2012 Accounts. The CS JU has also noted that results of a smaller number of separate ex-post audits have indicated balances in favour of the members, where the CS JU is likely to incur additional expenses to those originally claimed. These have been considered in Note (Short-term provisions for risks and charges) and do not form part of the contingent asset above. Ineligible cost claims In 2010, the JU performed an assessment of already validated cost claims related to GAMs 2008 and 2009, which identified K 572 of costs which it considers as possibly ineligible. At the date of preparation of the Final Accounts for 2011, the individual amounts in question were under investigation and clarification with the members. Therefore, a contingent asset of K 572, comprising of the related in-cash resources, is reported in order to cover the resulting eventual reduction of operational expense. Following a recommendation of the pean Court of Auditors, the full operational expense was included in the 2010 Final Accounts, in order to avoid showing unrealised income. No further expense or asset has been recognised in the 2011 Final Accounts in relation to these amounts. 22

23 BALANCE SHEET - LIABILITIES Net Assets Net assets (18,498,610.78) 21,453, Accumulated contributions received from Members (EC & others) 430,862, ,109, Accumulated contributions used during previous years (249,656,788.01) (879,438.54) 181,205, ,230, Contributions used during the year (total expenses) (202,772,681.65) (249,564,091.15) Operating & operational revenue 3,068, , Economic Outturn of the year (EOA) (199,704,408.52) (248,777,349.47) Net assets (18,498,610.78) 21,453, The Accumulated contributions received from members comprise of the entire funds received for the operational activity of the JU, which is managed through the Grant Agreements with members (GAMs) and partners (GAPs). Moreover, contributions to the running cost of the JU are included in this amount. For a detailed split up, see the table at the end of this section (Carry forward of Net Assets 2011). The Accumulated contributions used during previous years represent the total expense of the year 2008, 2009 and 2010 according to the Final Accounts The Contributions used during the year (EOA) include the total expense incurred by the JU during the year 2011 as shown in the Economic Outturn Account of 2011, see chapter 1.2, page 7. The operational expense shown in this amount contains the expenses incurred in-cash by the JU in 2011 for projects executed in the period 2008 to 2011 as well as the corresponding resources provided by the industry members relating to the same projects inkind (see comments in the chapter Introduction, page 3 and in the chapter Accounting Rules on page 10). The in-kind contribution included in the Net Assets of the JU has been approved by the Governing Board. A detailed split up is shown in the following tables. A certain part of the contribution provided by members to the research projects 2008 to 2011 has not yet been finally validated by the JU s management ( 72,423,484,08). This part of the contribution has not yet been presented for the approval of the Governing Board. It is 23

24 therefore not reflected in the Net Assets of the balance sheet, but is shown as a current liability of the JU, see notes to Members' contributions to be validated. Note on negative net assets: As at 31 December 2011, the CS JU has reported negative net assets of 18,498, This is due to the coinciding deadlines of establishing the annual accounts and validating the in-kind contribution. As noted above, only the in-kind contribution approved by the Governing Board is recognised in the Net Assets of the CS JU, representing cost claims which had been validated by management at the date of the Final Accounts 2011 preparation (see Note 2.2.2, page 13). As at the date of the Final Accounts 2011 preparation, there was a significant delay in receiving the cost claims for GAMs 2011, which were due on 1 st March 2012 to facilitate their validation. Due to the delay, for a large number of claims relating to projects executed in 2011, the validation could not be finalised by the closing date for the Final Accounts preparation (May 2012). Accordingly, these in-kind contributions were not approved by the Governing Board in The in-kind contributions for those cost claims not yet approved by the Governing Board are reflected in the liabilities of the Balance sheet as contributions to be validated. Following validation of cost claims by management and approval by the Governing Board later in 2012, these in-kind contributions will be transferred to the Net Assets of the CS JU in the 2012 Final Accounts. Therefore, the current status of the Net Assets has to be considered as transitional. The negative Net Assets do not indicate any risk of solvency, but are the consequence of the accounting method applied according to the specific accounting rules and guidance provided by the Commission for Joint Undertakings. 24

25 Carry forward of Net Assets 2011 EC contribution to running costs Opening balance at 01/01/10 Contribution paid in 2010 Running costs 2010 (50% share) Ending balance as of 31/12/10 Amount paid by EC in 2011 Running costs 2011 (50% share) Adjustments to contributions Ending balance of EC contribution at 31/12/11 3,094, , (1,730,592.18) 2,207, , (2,287,894.16) Other members contribution to running costs Opening balance at 01/01/10 Contribution paid in 2010 Running costs 2010 (50% share) Ending balance as of 31/12/10 Amount charged to other members in 2011 Running costs 2011 (50% share) Adjustments to contributions Ending balance of other members contribution at 31/12/ ,799, (1,730,592.18) 68, ,219, (2,287,894.16) 0.00 (19.13) Opening balance at 01/01/10 Contribution paid in 2010 Operational expense 2010 Ending balance as of 31/12/10 EC contribution to operational costs Amount received from the EC in 2011 Operational expense 2011 related to EC contribution (in cash) Rejected or negative cost claims previously expensed Ending balance of EC contribution at 31/12/11 71,153, ,000, (127,640,542.24) 43,512, ,919, (109,193,774.28) 1,168, ,407, Other members contribution to operational expenses Opening balance at 01/01/10 Contribution made in 2010 Operational expense 2010 Ending balance as of 31/12/10 In-kind contribution made by other members in 2011 Operational expense 2011 related to inkind contribution Rejected or negative cost claims previously expensed Ending balance of other members contribution at 31/12/ ,339, (118,462,364.56) (25,122,673.81) 40,533, (89,003,119.05) 1,168, (72,423,484.08) 25

26 Carry forward of Net Assets 2011 (totals) Opening balance at 01/01/10 Contribution received in 2010 Contribution used during 2010 Net Assets as of 31/12/2010 Contributions received during 2011 Contributions used during the year 2011 (total expenses) Adjustments of validated & rejected cost claims Net Assets as of 31/12/2011 before financial income 74,247, ,983, (249,564,091.16) 20,666, ,752, (202,772,681.65) 2,337, (20,016,077.69) Cumulative financial income received to 01/01/11 Total financial income received during the year 2011 Financial income & non-operating activities Net Assets as of 31/12/2011 including financial income 786, , (18,498,610.78) The total EC contribution to the CS JU in 2011 was The 2011 EC contribution to running costs ( 80,151.11) is determined as 50% of gross running costs incurred in the year ( 2.287,894.16) less the EC Contribution running costs brought forward from 2010 ( 2,207,743.05), with the remaining 2011 EC contribution attributed to operational expenses. The cumulative contributions made by the EC and other members to 31 December 2011 are as follows: Total Contributions to 01/01/11 Contributions in 2011 Total contributions to 31/12/11 EC Contribution to running costs 4,378, , ,458, Other members' contribution to running costs 2,239, ,219, ,458, EC contribution to operational expenses 171,153, ,919, ,072, Other members' in-kind contribution to operational expenses (see table below) 93,339, ,533, ,873, Total contributions 271,109, ,752, ,862,

27 Details of in-kind contribution as of 31/12/2011: 133,873, ,339, ITD Total in-kind contribution 2008 to 2011 as of 31/12/2011 ED 478, ,888, ,327, ,779, ,473, GRA 1,049, ,621, ,645, , ,755, GRC 725, ,761, ,470, ,493, ,451, SAGE 1,162, ,591, ,379, ,599, ,732, SFWA 1,794, ,639, ,691, ,647, ,773, SGO 1,690, ,590, ,291, ,322, ,894, TE 178, ,335, ,026, , ,792, Total 7,078, ,428, ,832, ,533, ,873, In 2011 the CS JU has noted a small number of low value adjustments to members contributions recognised in Net Assets in the 2010 Final Accounts. In accordance with Accounting Policies of the Commission for Joint Undertakings, and following approval by the Governing Board in 2012, these amounts have been deducted from Net Assets in these Final Accounts Current liabilities Members' contributions to be validated Members' contributions to be validated 72,423, ,122,

28 The amounts represent the contributions provided by members in-kind for the execution of GAMs of the years 2008 to After validation of the contributions through the GB, the amounts will be shifted to Net Assets and presented as Contribution received from members (see notes to Net Assets). The total amount corresponds to the negative ending balance of the Other members contribution to operational expenses in the Carry forward of Net Assets 2011 on page 19. Contribution provided for the execution of GAMs 2011 (subject to JU's management and GB approval) Contribution provided for the execution of GAMs 2008, 2009 and 2010 (based on cost-claims still subject to GB approval) ,527, , ,122, ,423, ,122, Accounts payable Accounts payable: 10,683, ,723, Amounts payable consolidated entities: 1, Other payables to EC bodies 1, Amounts payable to beneficiaries 883, Amounts payable to members and partners for validated cost claims. Amounts payable to suppliers 64, , The amount represents payables concerning invoices for running costs not yet paid at the year-end but relating to the year

29 Accrued charges operating costs 569, , For expenses pertaining to the financial year 2011, when invoices were received only subsequently in 2012, the following amounts have been accrued: Expenses charged by experts for evaluations performed in calls for tender 250, ,656 Ex-post audit 204,480 0 Unused holidays of staff in ,139 41,088 Other external service provider & interim staff 26, Staff training 20,000 2,740 Office suppliers & maintenance 10,000 0 Belgacom 5,000 9,473 Missions 8,352 6,903 External consultants 2,000 0 OIB services 1,066 1,638 Translation services 0 5,355 Rent of building & charges 0 172,272 Other rent expenses 0 3,375 Medical charges 0 2, , ,077 Accrued operational expense 9,163, ,207, Accrual of operational expense related to GAMs 2008 to ,167,586 11,583,147 Accrual of operational expense related to GAPs 2009, 2010 & ,996,059 2,624,132 9,163,645 14,207,279 The amounts had not been covered by pre-financings before. Therefore the operational expense is accrued in the liabilities of the JU. 29

30 Short-term provisions for risks and charges Provision for risks and charges 577, Potential additional CS JU contribution (in cash) to members resulting from ex-post audits 558, Refused salary increase 19, Potential additional CS JU contribution (in cash) to members resulting from ex-post audits As noted in Note (Contingent Assets), in 2011 the JU commissioned a number of expost audits of cost claims relating to GAMs 2008, 2009, and As at the date of preparation of the Final Accounts 2011, the results of these audits had yet to be formally finalised, however in a number of cases the auditors noted adjustments in favour of the members where the original amount of the claim had previously been validated by the CS JU. The CS JU has therefore considered it more probable than not that additional amounts will be payable to these members as a result of the ex-post audits. As these audits have yet to be formally finalised, the CS JU management has not yet received formal cost claims for these amounts. Therefore, neither a payable nor an accrual has been recognised in the Final Accounts 2011 as the outflows of economic benefit are not yet virtually certain. The amounts involved are however deemed to be reliably estimated by the CS JU, and the flow of economic benefits from the CS JU is judged by management to be more probable than not. A provision has therefore been recognised in the Final Accounts 2011 for these amounts. This provision represents the value of the probable JU contribution to these additional claim adjustments, which is half of the total claim adjustment. The other half of the additional claim adjustment ( 558,660) has been recognised as an in-kind contribution to be validated within liabilities. A total additional expense of 1,117,320 has thus been recognised in the Final Accounts 2011 relating to the results of these ex-post audits. On finalisation of these audits in 2012, and receipt of further adjusted cost claims, the appropriate accounting treatment will be considered for the 2012 Accounts. 30

31 Refused salary increase In compliance with the EU accounting rules, the CSJU has recognised in its Final Accounts 2011 a short term provision for outstanding salary payments relating to July-December 2011 which are currently under dispute between the pean Commission and pean Council, as it is probable that the payment will be made during Contingent liabilities In 2010 the CS JU disclosed a contingent liability for Mio. 5.8 pertaining to potential cost claim resubmissions following a number of rejected claims and/or the change of some eligibility provisions, which could be applied retrospectively. In 2011 the CS JU has received a number of these claims and has accounted for these in operational expenses where the claims were valid or on hold. Up to now, no further potential resubmission or adjustments of old cost claims have been indicated to the JU by its members. Therefore no contingent liability is reported as of 31 December Notes to the Economic Outturn Account Revenues Operational revenues 2,337, Other revenue - Rejected cost claims previously expensed 712, Negative claims received relating to claims previously approved as inkind contributions 1,625, ,337,

32 In 2011, the CS JU rejected a number of cost claims relating to 2008, 2009 and 2010 which had been 'on-hold' at the date of the Final Accounts 2010 ( 712,011.90). These claims had been recognised as an expense in the 2010 accounts, and held as a liability in 'Members' Contributions to be validated' on the 2010 Balance Sheet. Furthermore, in 2011 the CS JU received a number of negative claim adjustments from members relating to claims where the original amount had been approved as a valid in-kind contribution by the Governing Board for the Final Accounts 2010 ( 1,625,536.00). In accordance with EC Financial Guideline 03 (IV.2.1.4), these rejected and negative claims have been presented as 'Other Revenue' in the 2011 Final Accounts, and the corresponding liability in 'Members' Contributions to be validated' (rejected claims) or contribution 'In-kind contributions from members' (negative claims) has been reduced accordingly. Aside from the income above, no other operational or administrative revenues have been generated by the CS JU in Funds received in cash from the Commission and from the other members of the JU are shown as Contributions received from members in the Net Assets of the Balance Sheet. They do not appear as income of the JU in the EOA. Financial income is disclosed in section below. 32

33 2.4.2 Operational expenses Operational expenses of the Clean Sky Joint Undertaking in ,196, ,102, Operational expenses of the CS JU pertaining to research activities of the years 2008, 2009, 2010 and Operational expenses funded by CSJU in-cash 109,193, ,640, Operational expenses contributed by Members in-kind 89,003, ,462, ,196, ,102,

34 Operational Expenses by Year of Execution and Project Type: Expenses of projects executed in 2008 (GAM) 1,457,577 15,873,408 Expenses of projects executed in ,520,559 87,086,026 - GAM ,637,916 87,045,469 - GAP ,882,643 40,557 Expenses of projects executed in ,699, ,143,473 - GAM ,119, ,006,014 - GAP ,579,751 9,137,459 Expenses of projects executed in ,519, GAM ,791, GAP ,728, ,196, ,102,907 Expenses per category of beneficiaries Members 178,006, ,924,891 Partners 20,190,600 9,178, ,196, ,102,907 34

35 2.4.3 Operating Expenses Administrative expenses Staff expenses 2,319, ,045, Salaries and medical costs 2,258,503 2,004,192 Salary adjustment 1,7% 19,099 0 Accrual for unpaid holiday 42,139 41,088 2,319,741 2,045,280 At 31 December 2011 the JU employed 19 Temporary Agents and 5 Contract Agents (2010: 17 Temporary Agents and 3 Contract Agents). Fixed assets related expenses 14, Depreciation of office equipment, computer hardware and software, see Fixed Assets Analysis, page 15. Depreciation of Tangible assets 12, Amortisation of intangible assets 2, , Rent of building & office costs 302, , Office rent 196, ,236 Charges for facilities 58, ,147 Installation costs in the White Atrium (new office) and works in Covent Garden (old office) 47, , , ,080 35

36 In 2010 telephone charges were included within the charges for facilities at the old JU premises in Covent Garden, Brussels. In 2011, these costs have been included within communication costs in Other External Service Providers below Rent of furniture 1, , Office furniture in the old office had been rented. Office suppliers 54, , Low value furniture & equipment, cables 43, Stationary 11, , , , Communication & publications 390, , Le Bourget Paris Airshow 172,923 0 Workshop in Warsaw 6,929 0 IPAS 7,395 0 General Forum 35,383 70,862 Catering, food 18,367 22,063 Brochures & Newsletter 68,079 13,499 Info days 2,702 12,808 Exhibition stands of the CS JU 0 8,206 Online communication consultancy 0 8,000 Promotion materials, domain name Clean Sky 0 4,621 Team building meeting 9,677 4,710 Website of the Clean Sky Joint Undertaking 64,904 2,988 Sponsorship agreements 3,000 2,000 Other , ,757 Transport expenses 2, , Reimbursement of staff travel expenses. 36

37 Recruitment costs 2, , Costs for the recruitment of new staff in the year. Missions 161, , In 2011 Project Officers have attended a greater number of project kick-off meetings, technical events and steering committees with ITDs at the request of the JU management. In addition, several mid-term and final phase reviews have been conducted by Project officers in Experts and related expenditure 796, , The position includes expenses incurred for the evaluation exercise of calls for proposals performed in 2011 and comprises of daily allowances, travel expenses reimbursements and daily fees paid to internal and external experts. Training costs 46, , Staff training provided by the EC 16,445 12,930 External training 28,141 0 Other training 1,568 1,020 46,153 13,950 IT costs external services 101, , Commission debit notes for the use of IT tools and applications like ABAC and SAP. 20,000 30,827 Service of IT tools provided by external company Real Dolmen 60,794 0 Move of IT tools from Coven Garden to the White Atrium 17,335 0 Other 3, ,151 30,827 37

38 Other external service providers 381, , Ex-post audits of operational expenditure 206,480 0 Interim staff provided by temporary employment company 78,331 16,340 Phone costs and phone conference services 49, Consultancy service Safran 25,040 0 Catering - internal meetings 9,213 0 Moving company 5,333 0 Translation service 3,906 8,925 Legal service 2,122 0 Postage 846 1,638 Other services 1, ,901 27, Other operating expenses Exchange loss Net exchange loss in connection with the salary payment for one CSJU staff member. 38

39 2.4.4 Financial Income and Expenses Financial Income 730, , Bank interest on pre-financing from EU 604, , The amount represents interest income earned by the CSJU on its current bank accounts. Interest on late payment (income) 29, This amount represents interest payable by Members on late repayment of pre-financing returned to the CS JU where the expenditure on projects was less than the pre-financing paid to the Members. According to Art.51 CS Financial Rules, this income shall be credited to the budget of the JU. It is therefore reflected in the EOA under revenues and thus adds to the total of the Net Assets in the Balance Sheet of the JU, see page Financial income - interests on pre-financing given to Members 96, The amount represents interest income gained by Members or Partners (co-ordinators) in their bank accounts from the Clean Sky JU pre-financing. According to the JU financial rules this interest has been declared to the JU and will be off-set from the next payment to the Members or Partners Financial expenses Bank charges for late payment of charges and cost of one debit note. 39