2005 FINANCIAL STATEMENTS

Transcription

1 2005 FINANCIAL STATEMENTS

2 TABLE OF CONTENTS PAGE I. ACCOUNTING POLICIES AND PRINCIPLES 3 II. FINANCIAL STATEMENTS 1. BALANCE SHEET 8 2. PROFIT AND LOSS STATEMENT CASH FLOW STATEMENT STATEMENT OF CHANGES IN CAPITAL RECONCILIATION BUDGETARY /ECONOMIC OUTTURN 22 III. BUDGETARY EXECUTION 1. BUDGET OUTTURN ACCOUNT BUDGET IMPLEMENTATION CREDIT OPERATIONS ESTABLISHMENT PLAN

3 I. ACCOUNTING POLICIES AND PRINCIPLES The principles and the principal accounting policies adopted in the preparation of the EASA financial statements are set out below. A. Basis of preparation The objectives of financial statements are to provide information about the financial position, performance and cash flows of an entity that is useful to a wide range of users. For an agency such as EASA, the objectives are more specifically to provide information useful for decision making, and to demonstrate the accountability of the entity for the resources entrusted to it. If they are to present a true and fair view, financial statements must not only supply relevant information to describe the nature and range of an agency s activities, explain how it is financed and supply definitive information on its operations, but do so in a clear and comprehensible manner which allows comparisons between financial years. It is with these goals in mind that the present document has been drawn up. The accounting system of the European Institutions comprises general accounts and budget accounts. These accounts are kept in euro on the basis of the calendar year. The budget accounts give a detailed picture of the implementation of the budget. They are based on the modified cash accounting principle. 1 The general accounts allow for the preparation of the financial statements as they show all charges and income for the financial year and are designed to establish the financial position in the form of a balance sheet at 31 December. The financial statements have been drawn up in accordance with: - Regulation 643/2005 amending regulation 2909/2000 (EU bodies institutions), - the EASA Financial Regulation (adopted by the Management Board on 30/07/03), - the EASA Implementing Rules (adopted by the Management Board on 14/06/05). The accounting principles are the following: - Going concern basis (Financial Regulation art.78, Implementig Rules art.145): EASA is deemed to have been established for an indefinite duration. - Prudence (Financial Regulation art.78, Implementig Rules art.147): Assets and income have not been overstated, liabilities and expenses have not been understated. No hidden reserves have been created. - Consistency of accounting methods and presentation Financial Regulation art.78, Implementig Rules art.148): According to this principle the accounting methods and valuation may not be changed from one year to the next. IPSAS rules applicable last year are still the reference and have been adapted to cope with the European institutions needs. 1 This differs from cash-based accounting because of elements such as carryovers.

4 - Comparability of information (Financial Regulation art.78, Implementig Rules art.149): The financial statements shall show the amount of the corresponding item for the previous year. Where the presentation or the classification of one of the components is changed, the corresponding amounts for the previous year shall be made comparable and reclassified. - Materiality (Financial Regulation art.78, Implementig Rules art.150): The financial statements have been presented according to this principle. It means that items that are material by virtue of their nature should be presented separately in the financial statements. Items that are material by virtue of their size but with the same nature can be aggregated. Immaterial amounts should be aggregated with amounts of similar nature or function and need to be presented separately. - Offsetting, no netting (Financial Regulation art.78, Implementig Rules art.151): In accordance with this principle, assets and liabilities may not be offset against each other, nor may revenues and expenses, save where the revenues and expenses derive from the same transaction, from similar transactions or from hedging operations and provided that they are not individually material. - Substance over form, reality over appearance (Financial Regulation art.78, Implementig Rules art.152): In order to represent faithfully the transactions and other events that it purports to represent, it is necessary that they are accounted for and presented in accordance with their substance and economic reality and not merely their legal form. - Valuation of assets and liabilities (Financial Regulation art.79, Implementig Rules art.154): Assets and liabilities shall be valuated at purchase price or production cost, less any accumulated depreciation and impairment losses. B. Foreign currency transactions The consolidated financial statements are presented in euros, which is the European Communities' functional and reporting currency. Foreign currency transactions are accounted for the exchange rates prevailing on the data of the transactions. Both realised and unrealised gains and losses resulting from the settlement of such transactions and from the revaluation at reporting date of monetary assets and liabilities denominated in foreign currencies are recognised in the Profit and Loss Account

5 C. Fixed assets Intangible assets Intangible fixed assets are valued at their acquisition price, with the exception of assets acquired free of charge that are valued at their market value. Tangible and intangible fixed assets are valued at their historic value converted into euros at the rate applying when they were purchased. The book value of a fixed asset is equal to its acquisition price or production cost, plus or minus revaluations, depreciation and other amounts written off. See depreciation rates below. Tangible assets All assets are stated at historical cost less depreciation and impairment. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the assets 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 EASA 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. Depreciation on assets is calculated using the straight-line method to allocate their cost to their residual values over their estimated useful lives, as follows: Depreciation rates Asset type % Intangible fixed assets Software for personal computers and servers 25,0% Tangible fixed assets Furniture and vehicles Office, laboratory and workshop furniture 10,0% Electrical office equipment, printing and mailing equipment 25,0% Computer hardware Computers, servers, accessories, data transfer equipment, printers, screens 25,0% Copying equipment, digitising and scanning equipment 25,0% Other fixtures and fittings Telecommunications equipment 25,0% Audiovisual equipment 25,0% Health, safety and protective equipment, medical equipment, fire-fighting equipment, equipment for surveillance and security services 12,5% The assets residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date, so that all fixed assets are stated at the lower of carrying value or net realisable value. Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the economic outturn account

6 D. Pre-financing amounts Pre-financing is a payment intended to provide the beneficiary with a cash advance. It may be split into a number of payments over a period defined in the particular pre-financing agreement. The advance is repaid or used for the purpose for which it was provided during the period defined in the agreement. If the beneficiary does not incur eligible expenditures, he has the obligation to return the pre-financing advance to EASA. The amount of the pre-financing is reduced (wholly or partially) by the acceptance of eligible costs and amounts returned. At year-end outstanding pre-financing amounts are valued at the original amount(s) paid less amounts returned, eligible amounts cleared, estimated eligible amounts not yet cleared at yearend, and value reductions. Guarantees related to pre-financing amounts are disclosed in the off-balance sheet as contingent assets. E. Receivables Receivables are stated at net realisable value. No provision for loss is recorded with respect to receivables related to EU entities. For all other receivables, a provision for loss is established based on a review of outstanding amounts at reporting date. F. Provisions for charges. Provisions are recognized when EASA has a legal or a constructive obligation as a result of past transactions, when it is probable that an outflow of resources will be required to settle the obligation and when a reliable estimate of the amount of the obligation can be foreseen. G. Revenue and expense recognition Accrual accounting is applied to revenues and expenses. Revenue from fees for certificates or approvals is recognised as the technical investigation work is done. Revenue from annual and surveillance fees is recognised pro-rata temporis. Expense for subcontracted activities is recognised in the economic outturn on the basis of the work done. H. Contingent assets and liabilities 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 EASA. A contingent liability is: (a) 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 EASA; or (b) A present obligation that arises from past events but is not recognised because: (i) It is not probable that an outflow of resources embodying economic benefits or service potential will be required to settle the obligation; or (ii) The amount of the obligation cannot be measured with sufficient reliability

7 I. Use of estimates In accordance with generally accepted accounting principles, the financial statements necessarily include amounts based on estimates and assumptions by management. Significant estimates include, but are not limited to, provisions for future charges, financial risk on accounts receivable, accrued income and charges, contingent assets and liabilities, and degree of impairment of fixed assets. Actual results could differ from those estimates. Changes in estimates are reflected in the period in which they become known. J. Employee Benefits: The staff of the Agency is entitled to pensions rights according to the pension scheme as defined in the Staff Regulations of the European Communities. The corresponding pension benefits are managed and paid by the European Commission. In compliance with Article 83a of the Staff Regulations, the contribution needed to fund the scheme is financed by the General Budget of the European Union and no employer contribution is paid by the Agency. As a result of this, no pension liability is recognised in the balance sheet of the Agency

8 II. FINANCIAL STATEMENTS 1. BALANCE SHEET ASSETS A.NON-CURRENT ASSETS Intangible fixed assets Computer Software , ,54 Tangible fixed assets Land and buildings 0,00 Plants and equipment 0,00 Computer Hardware , ,84 Furniture and vehicles , ,19 Other fixture and fittings , ,21 Other tangible fixed assets Total , ,78 B. CURRENT ASSETS Stock Short-term pre-financing Advance to third parties ,00 Short-term receivables Current receivables ,81 0,00 Sundry receivables , ,15 Other receivables - Accrued revenues , ,64 Other receivables- deferred charges ,14 EC entities , ,51 Cash and equivalents Bank , ,79 Total , ,09 TOTAL ASSETS , ,87-8 -

9 LIABILITIES A.CAPITAL Retained earning , ,01 Result of the year , ,80 Total , ,21 B. NON-CURRENT LIABILITIES Employee benefits Provisions for risks and liabilities Financial Liabilities Other Long term Liabilities Total 0,00 0,00 C. CURRENT LIABILITIES Employee benefits Provision for risks and liabilities Financial Liabilities Accounts payables Current payables , ,00 Sundry payables , ,04 Other payables - Accrued charges ,88 Other payables - Deferred revenues ,20 0,00 Payables sickness insurance ,38 EC entities , ,62 Total , ,66 TOTAL LIABILITIES , , ASSETS NON-CURRENT ASSETS Fixed assets are booked at purchase price less accumulated depreciation. Individual assets are booked when their value is equal or greater than 420 EUR. However, separate components, which have a value smaller than 420 EUR, are also booked in fixed assets when they are part of a whole or a bundle of items

10 DEPRECIATION TABLES Intangible assets Computer Software Others Intangible fixed assets under construction TOTAL Gross carrying amounts 1 Jan., <<2005>> ,98 0,00 0, ,98 Additions , ,19 Disposals 0,00 Other changes 0,00 Gross carrying amounts 31 Dec. <<2005>> ,17 0,00 0, ,17 Accumulated amortizations 1 Jan., <<2005>> , ,44 Amortizations , ,38 Write-back of amortizations Disposals Impairment Write-back of impairment Other changes Accumulated amortization 31 Dec <<2005>> ,82 0,00 0, ,82 Net carrying amounts 31 Dec. <<2005>> ,35 0,00 0, ,35 Type of asset Computer Software % Amortization 4 years (48 month, 25% per year)

11 Tangible fixed assets Land Buildings Plant and equipment Computer hardware Furniture and vehicles Other fixtures and fittings TOTAL Gross carrying amounts 1 Jan. <<2005>> 0,00 0,00 0, , , , ,86 Additions , , , ,03 Disposals 0,00 Other changes 0,00 Gross carrying amounts 31 Dec. <<2005>> 0,00 0,00 0, , , , , Accumulated depreciations 1 Jan. <<2005>> , , , ,62 Depreciations <<2005>> , , , ,65 Write-back of depreciation 0,00 Disposals 0,00 Impairment 0,00 Write-back of impairment 0,00 Other changes 0,00 Accumulated depreciation 31 Dec. <<2005>> 0,00 0,00 0, , , , ,27 Net carrying amounts 31 Dec. <2005> 0,00 0,00 0, , , , ,62 Type of asset Computer Hardware Other fixture and fittings Other fixture and fittings Movable furniture % Amortization 4 years (48 months, 25% per year) 8 years (96months, 12,5% per year) 4 years (48 months, 25% per year) 10 years (120 months, 10% per year)

12 CURRENT ASSETS Short-term pre-financing Advance to third parties for a study 0, ,00 Short-term receivables Current Receivables Customers ,33 0,00 Doubtfull Customers ,72 0,00 VAT recoverable ,20 0,00 Total current receivables ,81 0,00 Sundry Receivables Salary advance , ,48 Advance on missions , ,41 Advance on Removal costs ,93 0,00 VAT to recover (Germany) 0, ,13 CSS (partial reimbursment of contribution) 0, ,87 Others 243, ,26 Total Sundry receivables , ,15 Other receivables (Prepaid expenses and accrued incomes) Bank interests , ,64 Accrued revenues (Fees & charges) ,76 0,00 Prepaid hardware and software maintenance & services , ,14 Prepaid insurance 2.718,04 989,86 Prepaid subscriptions 1.713,39 128,00 Other 40,00 40,00 Total other receivables , ,64 EC entities DG TREN (Efta contribution) , ,64 Agencies 9.048, ,87 Total other receivables , ,51 Cash and equivalents Bank accounts , ,79 Total current assets , ,

13 Due to the entry into force of the Regulation (EC) No. 488/2005 on the fees and charges levied by the Agency on 1 st June 2005, the invoicing process has been implemented and the 2005 annual accounts now reflect in current receivables invoices which are unpaid at 31/12/2005. Since the accounts receivable balance shows long overdue amounts, a provision for doubtful customers equal to 15 % of the over due amounts since July 2005 has been recorded to adjust receivables to their estimated fair value. On top of this general provision, an amount of has also been booked to cover a possible loss on one specific project. In 2005 the VAT to recover from German Authorities has been reclassified from the sundry receivables to the current receivables in order to cope with the consolidation reporting package ruling as per the European Commission requirements. Under the other receivable section, a provision of ,76 for invoices to be issued has been calculated in order to take into account the revenues generated by certification activities completed as of end December 2005 and not yet invoiced. Advances on missions and removals have significantly increased due to important recruitment of new staff in

14 1.2. LIABILITIES CAPITAL Retained earning/deficit Beginning balance as previously reported , ,18 Effect of change between cash & accrual accounting , , ,01 Result of the year Budgetary outturn , ,88 Adjustment economic outurn , , , , CURRENT LIABILITIES Accounts payables Current payables(accrued expenses & differed incomes)* Accrued expenses on title I , ,96 Accrued expenses on Title II , ,59 Invoice to receive for fixed assets delivered , ,33 Accrued expenses on Title III , ,28 Differed income ,20 145,84 Total current payables , ,00 Sundry payables Staff expenses (soc security auxiliaires+untaken annual leave) , ,59 Invoice to be received agencies 7.810,45 0,00 Other 1.647, ,45 Total sundry payables , ,04 Payables EC entities Interest to reimburse to European Commission , ,12 Subsidy to reimburse to European Commission , ,88 Social Security and taxes to pay to European Comission , ,29 Sickness insurance to pay European Commission ,38 0,00 Invoice to be received PMO ,67 Invoice not booked Medical service , ,00 Invoice not booked OIB 642, ,76 Invoice not booked CDT , ,75 Invoice to be received OPOCE 0, ,15 Invoice to be received SIC 0, ,00 Total payables EC entities , ,62 Total current Liabilities , ,

15 Accrued expenses Under current payables, the amount of accrued expenses has substantially increased reaching ,36. More than 6.1 million is related to large amount of certification projects subcontracted to National Aviation Authorities and not yet invoiced as of December This amount includes invoices received till the date of preparation of the accounts. As the related invoices do not cover the totality of the period running till the end of the year, the work done in 2005 and not yet invoiced by the National Aviation Authority has been estimated on the basis of reasonable extrapolation and experience from previous invoices. The missions, meeting and representation costs linked to Certification & Rule making activities have been shifted from title I to title III since begin 2005 to reflect the operational nature of the charges. This also justify the increase in the other accrued expenses under title III. Deferred income The amount of ,20 is made of : Annual fees & surveillance fees portion of 2006 invoiced in 2005 and deferred based on the pro-rata temporis method. Organisation approvals fees deferred amounts, based on the cycle start of applications. Product certification advance payment fees related to application for which no technical work has been started at 31/12/2005. Sundry payables A provision of ,20 for untaken annual leave has been set up for the first time in

16 2. PROFIT AND LOSS STATEMENT 2. PROFIT AND LOSS STATEMENT Recuperation of expenses (job tickets) , ,87 Revenues from administrative operations From third parties , ,07 From EC entities , ,12 Other operating revenues Fees and Charges revenue ,04 From third parties (donated assets) , ,66 From EC entities (Efta contribution) ,00 TOTAL OPERATING REVENUES , ,72 Administrative expenses Staff expenses(62) , ,42 Buildings and related expenses(61) , ,68 Other expenses(61) , ,33 Depreciation and write offs(63) , ,34 Operating expenses Other operating expenses From third parties (60) , ,43 TOTAL OPERATING EXPENSES , ,20 SURPLUS/ (DEFICIT) FROM OPERATING ACTIVITIES , ,48 Financial operations revenues From third parties ,99 143,60 Financial operations expenses From third parties , ,92 SURPLUS/ (DEFICIT) FROM NON OPERATING ACTIVITIES , ,32 SURPLUS/ (DEFICIT) FROM ORDINARY ACTIVITIES , ,80 Extraordinary gains Extraordinary losses SURPLUS/ (DEFICIT) FROM EXTRAORDINARY ITEMS 0,00 0,00 ECONOMIC RESULT OF THE YEAR , ,

17 OPERATING REVENUE Recuperation of expenses Backcharge of expenses to third parties & staff (744910) , ,87 Administrative revenues DG TREN (European Commission)(744919) , ,12 German ministery of Transport (745910) , , , ,19 Other operating revenues Sales & revenues with third parties- Fees & Charges(745910) ,04 0,00 Donated furniture and equipment (744100) , ,66 EFTA countries contributions ,00 0, , ,66 TOTAL OPERATING REVENUE: , ,72 The revenues in 2005 consist of different sources : The subsidy received from the European Commission. The amount paid by DG Transport and Energy was ,00 and initially considered as pre-financing. Out of this figure only ,07 is actually booked as revenue for EASA in Balance is to be reimbursed to the European Commission. The revenue generated from the seven months Fees & Charges activity Federal Ministry of Transport provides variable annual grants to cover the rental costs. Increase in 2005 versus 2004 reflects both full-year impact and allocation of new spaces. NRW state has also contributed by donating furniture and equipment like previous year

18 2.2. OPERATING EXPENSES Administrative expenses Staff expenses: Salaries and related allowances , ,48 Social security , ,36 Other personnel expenses , ,58 Total staff expenses , ,42 Building and related expenses Rent , ,02 Related expenses , ,66 Total building and related expenses , ,68 Other expenses: Temporary assistance , ,44 Administrative assistance , ,67 Recruitment cost , ,30 Missions, experts costs , ,00 Training cost , ,07 Information, communication technology and equipment , ,65 Stationary, Office supplies, documentation, library , ,40 Legal expenses 8.624, ,00 Postage and telecommunication , ,04 Other , ,76 Total other expenses , ,33 Depreciation expenses: Depreciation of fixed assets , ,34 Doubtful customers provision ,72 Total other expenses , ,34 Operational expenses Certification activities , ,67 Other operating expenses , , , ,43 TOTAL OPERATING EXPENSES: , ,20 Except for depreciation expenses, the administrative expenses correspond to title I and II of the annual budget after accrual adjustments. An analysis of Title I, II and III can be found in the detailed budget implementation tables, section III. Accrual adjustments are accounting entries necessary to comply with IPAS rules and are not part of budgetary reporting. These adjustments concern capital expenditure considered as fixed assets instead of expenses and their related depreciation. Accrued and differed expenses/income adjustments are also booked to respect the timing of expenses and revenues recognition. Revenue is recognised in accrual accounting when it is earned and expense when the service has been rendered or the goods delivered, no matter if related cash has been received or disbursed

19 More detail can be found in the reconciliation between the budgetary and the economic outturn. The staff expenses increase is due to important recruitment during year This year building expenses are more important due to allocation of new spaces and full year occupation. More interim staff has been hired to support the different departments in the start up phase of the fees and charges activity. Payroll provider cost (under administrative assistance) is calculated by head count and thus follows the staff cost increase. Due to larger contacts in an international environment, the postage and telecommunication cost has also shown significant increase compared to last year. Full year depreciation cost linked to the fixed assets acquired prior to 2005 and to the new acquisitions purchased in 2005 has an impact on the other expenses line FINANCIAL REVENUE Exchange differences (74) 441,22 143,60 Bank interests ,95 0, ,17 143, FINANCIAL EXPENSES Bank charges 9.000, ,05 Exchange differences (64) 3.333,60 497,51 Other financial charges 2.000,00 482, , ,92 A financial revenue has been generated due to interests received on collected amount from customers. On the other hand the bank charges have increased due to correspondent fees linked to customers wires. International wires for large amounts to National authorities are the other main impact

20 3. CASH FLOW STATEMENT Cash Flows from ordinary activities Surplus/(deficit) from ordinary activities , ,80 Adjustments Amortization (intangible fixed assets) , ,19 Depreciation (tangible fixed assets) , ,15 Increase / (decrease) in Provisions for risks and liabilities Increase / (decrease) in Employee benefits ,88 Increase / (decrease) in Value reduction for doubtful receivables ,72 (Increase) / decrease in Stocks (Increase) / decrease in Long term Pre-financing (Increase) / decrease in Short term Pre-financing , ,00 (Increase) / decrease in Long term Receivables (Increase) / decrease in Short term Receivables , ,46 (Increase) / decrease in Receivables from consolidated EC entities ,49 Increase / (decrease) in Long term liabilities Increase / (decrease) in Accounts payables , ,78 Increase / (decrease) in Other liabilities Increase / (decrease) in Liabilities related to consolidated EC , ,50 (Gains) / losses on sale of Property, plant and equipment Donated tangible fixed assets , ,66 Net Cash Flow from ordinary activities , ,24 Cash Flows from loans and borrowings (Increase) / decrease in financial assets (own funds) (Increase) / decrease in financial assets (funds borrowed) Increase / (decrease) in financial liabilities (funds borrowed)) Net cash flow from loans and borrowings 0,00 Cash Flows from investing activities Purchase of tangible and intangible fixed assets , ,37 Donated tangible fixed assets Proceeds from tangible and intangible fixed assets (Increase) / decrease in financial assets (Increase) / decrease in investments Dividends received (+) Net cash flow from investing activities , ,03 Cash Flows from financing activities Increase / (decrease) in financial liabilities Increase / (decrease) in Long term liabilities (Increase) / decrease in financial revenues ,95 (Increase) / decrease in financial expenses ,00 Distribution paid to Member States (-) Net Cash Flow from financing activities Net increase / decrease in cash and cash equivalents Cash and cash equivalents at the beginning of period Cash and cash equivalents at the end of period , , , , , , ,

21 In 2005, the cash flow statement has been calculated starting from the result coming from the ordinary activities to be in line with EC consolidation requirements. In 2004, the economic result of the year had been considered. The amount reported as donated fixed assets ( ,66 in 2004) has been reclassified from Cash flow from investing activities to cash flow from ordinary activities. This change has been done to be compliant with the accounting rules related to financial statements chapter V2 (non cash transaction). 4. STATEMENT OF CHANGES IN CAPITAL Capital Accumulated Surplus / Deficit Economic result of the year Capital (total) Balance as of 31 December , ,21 Balance as of 1 January ,21 0, ,21 Economic result of the year , ,35 Balance as of 31 December , , ,

22 5. RECONCILIATION BUDGETARY OUTTURN VERSUS ECONOMIC RESULT RECONCILIATION BUDGETARY OUTTURN VERSUS ECONOMIC RESULT Budgetary revenue outturn (a) , ,88 Adjustments Part of the subsidy to reimburse to E.C , ,88 Impact on fixed assets Purchase of intangible fixed assets , ,98 Purchase of tangible fixed assets , ,05 Fixed assets donated , ,66 Depreciation , ,34 Impact of the accrued expenses of the year Carryovers , ,05 Accrued expenses , ,47 Reversal of previous year accrued expenses Carryovers previous year , ,18 Reversal other liabilities previous year , ,94 Impact of supplier pre-financing Advance to suppliers of the year ,00 Neutralisation of the previous year ,00 0,00 Neutralisation of the budgetary loss ,18 Impact of accrued/differeded revenue fees & Charges Differed revenue ,20 Accrued revenue ,76 Difference between cash & Invoice ,41 Other impacts Exceptional revenue - fixed assets donated , ,66 Other revenue (Efta Contribution) , ,87 Reversal other revenue previous year 0,00 Prepaid expenses and accrued incomes , ,00 Reversal prepaid expenses previous year , ,86 Adjustment previous year (salary corrections) ,92 Provision for untaken annual leave ,20 Financial revenue (bank interests) ,95 Provision doubtfull customers ,72 Total adjustments (b) , ,66 ECONOMIC RESULT (a-b) , ,

23 In order to respect the accrual based accounting principles, a number of timing or permanent differences exist with the budgetary accounting. This requires adjustments to be accounted for each of those differences. In budgetary accounting, income is accounted when revenue is cashed. In accrual based accounting, income is accounted only when the revenue is earned; the balance is treated as deferred income. The expenses are accounted according to budgetary accounting when the payment has occurred. In accrual based accounting, the expenses are booked when the service is rendered or when the good is delivered. In budgetary accounting, capital expenditures are recorded as current year expenses. This cost is spread out on several years in accrual based accounting, where capital expenditures are recorded on the asset side of the balance sheet. The depreciation is recorded in the profit and loss statement. In accrual accounting, the revenue is adjusted by provisions for losses on receivables

24 III. BUDGETARY EXECUTION 1. BUDGET OUTTURN ACCOUNT FOR THE YEARS 2005 AND Revenue Own Revenue 15,730, Commission subsidy 18,930, ,050, Ministery of Transport of the FR of Germany contribution (ear-marked revenue) 1,425, , Third countries contribution 399, Administrative Operations 46, Total revenue (a) 36,531, Revenue not collected (b) 7,561, Total revenue collected (a-b)=(c) 28,970, ,297, Expenditure Personnel expenses - Budget title I Payments 13,731, ,685, Payments (earn-marked revenue) 22, Automatic carryovers 213, , Administrative expenses - Budget Title II Payments 1,245, ,002, Payments (earn-marked revenue) 1,401, , Automatic carryovers 781, , Non-automatic carryovers Operational expenses - Budget Title III Payments 4,656, , Automatic carryovers 1,276, , Non-automatic carryovers 4,334, , Total expenditure (d) 27,662, ,997, Outturn for the financial year (c-d) 1,307, ,300, Cancellation of unused carryovers 208, ,186, Balance carried over from year N-1-213, Exchange differences for the year -2, Balance of the outturn account for the financial year 1,513, ,272, Interest on the EC subsidy to be reimbursed to Commission 144, , The collected revenue corresponds to: Fee income cashed: ,07 Commission subsidy: ,00 German Ministry contribution: ,00 Other Administrative operations: ,

25 2. BUDGET IMPLEMENTATION FOR THE YEARS 2005 AND TITLE I - Staff expenses Payments Commitment Commitment/Payments Budget appropriation (1) , , ,00 Commited , ,81 Paid , ,27 Automatic carryovers , ,54 Total expenditure (2) , , ,81 Cancelled , , ,19 % used on budget appropriation (1)-(2) 86,26% 86,26% 76,85% TITLE II - Administrative expenses Budget appropriation - C1+R0 (1) , , ,28 Commited , ,51 Paid , ,53 Automatic carryovers , ,98 Total expenditure (2) , , ,51 Cancelled , , ,77 % used on budget appropriation (1)-(2) 92,87% 92,87% 81,13% TITLE III - Operating expenses Budget appropriation (1) , , ,00 Commited , ,26 Paid , ,73 Automatic carryovers , ,53 Non-automatic carryovers , ,00 Total expenditure (2) , , ,26 Cancelled , , ,74 % used on budget appropriation (1)-(2) 87,77% 68,98% 94,60% TOTAL Budget appropriation - C1+R0 (1) , , ,28 Commited , ,58 Paid , ,53 Automatic carryovers , ,05 Non-automatic carryovers , ,00 Total expenditure (2) , , ,58 Cancelled , , ,70 % used on budget appropriation (1)-(2) 87,59% 78,19% 79,36%

26 Major aspects of the implementation of the annual budget are the following: In 2005, as a result of the start of the Certification activities, EASA has differentiated credits on title III and more specifically for subcontracted certification activities. The total commitment appropriation reached 39,98 million, of which 31,26 million (78 %) have been committed. The total available payment appropriation reached 31,58 million, of which 21,05 million (66%) have been paid and 6,60 million (21%) were carried over, 3,92 (13%) were cancelled

27 Budget Execution C1: Commitment Appropriation Transaction Amount Payment Appropriation Transaction Amount Budget Line Budget Line Description Executed Commitment % Executed Payment % Position Amount Committed Amount Paid RAL (1) (2) (2)/(1) (3) (4) (4)/(3) (3)-(4) 1100 Basic Salaries , ,74 94,39% , ,74 94,39% 0, Family Allowances , ,73 81,70% , ,73 81,70% 0, Expatriations and Foreign-Residence Allowances , ,51 95,86% , ,51 95,86% 0, Secreterial Allowances , ,53 26,60% , ,53 26,60% 0,00 Total Article , ,51 93,48% , ,51 93,48% 0, Auxiliary Staff , ,04 85,27% , ,04 85,27% 0, Temporary Assistance , ,17 87,41% , ,17 83,41% , Contractual Agents , ,37 62,43% , ,37 62,43% 0, Total Article , ,58 74,21% , ,58 73,54% , Insurance against Sickness , ,95 94,96% , ,95 94,96% 0, Insurance against Accidents and Occupational Diseases , ,17 98,59% , ,17 98,59% 0, Insurance against Unemployment , ,96 96,56% , ,96 96,56% 0,00 Total Article , ,08 95,89% , ,08 95,89% 0, Childbirth and Death Allowances and Grants 5.000,00 991,55 19,83% 5.000,00 991,55 19,83% 0, Travel Expenses for Annual Leave , ,39 69,96% , ,39 69,96% 0, Other Allowances , ,31 65,20% , ,31 65,20% 0,00 Total Article , ,25 66,50% , ,25 66,50% 0, Overtime , ,64 9,96% , ,64 9,96% 0,00 Total Article , ,64 9,96% , ,64 9,96% 0, Translation Costs CdT , ,74 52,30% , ,73 44,75% 7.547, Administrative Services of the CdT , ,50 12,75% , ,50 12,75% 0, Administrative Assistance from Community Institutions , ,00 82,14% , ,00 38,43% , External Services , ,41 36,20% , ,41 18,28% 4.480,00 Total Article , ,65 62,20% , ,64 37,71% , Salary Weightings , ,73 47,84% , ,73 47,84% 0,00 Total Article , ,73 47,84% , ,73 47,84% 0,00 Total Chapter , ,44 90,00% , ,43 89,48% ,01

28 Budget Execution C1: Commitment Appropriation Transaction Amount Payment Appropriation Transaction Amount Budget Line Budget Line Description Executed Commitment % Executed Payment % Position Amount Committed Amount Paid RAL (1) (2) (2)/(1) (3) (4) (4)/(3) (3)-(4) 1200 Miscellaneous Expenditure on Staff Recruitment , ,28 61,58% , ,08 44,14% , Travel Expenses , ,52 11,82% , ,52 11,82% 0, Installation, Resettlement and Transfer Allowances , ,20 83,90% , ,20 83,90% 0, Removal Expenses , ,13 48,82% , ,70 35,86% , Temporary Daily Subsistence Allowances , ,61 65,38% , ,61 65,38% 0,00 Total Article , ,74 64,54% , ,11 60,72% ,63 Total Chapter , ,74 64,54% , ,11 60,72% , Administrative Missions Expenditures , ,57 62,55% , ,96 54,25% 3.069, Total Article , ,57 62,55% , ,96 54,25% 3.069,61 Total Chapter , ,57 62,55% , ,96 54,25% 3.069, Medical service , ,05 79,93% , ,05 56,68% ,00 Total Article , ,05 79,93% , ,05 56,68% , Language and Other Training , ,67 45,29% , ,89 6,18% ,78 Total Article , ,67 45,29% , ,89 6,18% , Social Welfare of Staff , ,00 100,00% , ,26 85,22% 5.026,74 Total Article , ,00 100,00% , ,26 85,22% 5.026,74 Total Chapter , ,72 65,08% , ,20 34,89% , Reception and Events , ,46 63,72% , ,40 41,47% 6.450,06 Total Article , ,46 63,72% , ,40 41,47% 6.450,06 Total Chapter , ,46 63,72% , ,40 41,47% 6.450,06 Total Title , ,93 86,26% , ,10 84,94% ,83

29 Budget Execution C1: Commitment Appropriation Transaction Amount Payment Appropriation Transaction Amount Budget Line Budget Line Description Executed Commitment % Executed Payment % Position Amount Committed Amount Paid RAL (1) (2) (2)/(1) (3) (4) (4)/(3) (3)-(4) 2000 Rental Costs , ,50 100,00% , ,50 100,00% 0,00 Total Article , ,50 100,00% , ,50 100,00% 0, Insurance 9.770, ,41 99,99% 9.770, ,33 87,77% 1.194,08 Total Article , ,41 99,99% 9.770, ,33 87,77% 1.194, Water, Gas, Electricity and Heating , ,00 100,00% , ,00 40,00% ,00 Total Article , ,00 100,00% , ,00 40,00% , Cleaning and Maintenance , ,20 100,00% , ,39 90,47% 2.634,81 Total Article , ,20 100,00% , ,39 90,47% 2.634, Fitting-Out of Premises , ,67 100,00% ,00 0,00 0,00 % ,67 Total Article , ,67 100,00% ,00 0,00 0,00 % , Secuity and Surveillance of Buildings , ,40 100,00% , ,70 89,84% , Other Building Expenditure 600,00 595,00 99,17% 600,00 595,00 99,17% 0,00 Total Article , ,40 100,00% , ,70 89,88% , Preliminary Expenditure to Construction, Acquisition or Rental of Immovable Property , ,00 100,00% , ,00 9,82% ,00 Total Article , ,00 100,00% , ,00 9,82% ,00 Total Chapter , ,18 100,00% , ,92 85,90% , ICT Equipment , ,44 98,02% , ,96 29,97% , External Services for Eternal Data Processing and Studies , ,00 100,00% , ,00 100,00% 0, ICT Maintenance , ,48 91,56% , ,39 14,54% , ICT Training , ,56 54,31% ,00 478,06 1,98% , Other ICT Expenditure 3.000, ,00 100,00% 3.000, ,00 100,00% 0,00 Total Article , ,48 95,92% , ,41 29,13% ,07 Total Chapter , ,48 95,92% , ,41 29,13% , Technical Equipment and Installations , ,57 54,28% , ,57 54,28% 0, Maintenance and Repair of Technical Equipment and Installations 5.000, ,00 29,04% 5.000, ,00 29,04% 0, Office Supplies , ,08 92,38% , ,32 77,33% 7.377,76 Total Article , ,65 81,06% , ,89 69,71% 7.377, Special Library, Documentation and Reproduction Equipment , ,88 50,78% , ,88 50,78% 0, Subscription to Newspapers and Periodicals , ,91 59,92% , ,91 56,59% 700,00 Total Article , ,79 56,97% , ,79 54,71% 700,00 Total Chapter , ,44 73,28% , ,68 64,87% 8.077,76

30 Budget Execution C1: Commitment Appropriation Transaction Amount Payment Appropriation Transaction Amount Budget Line Budget Line Description Executed Commitment % Executed Payment % Position Amount Committed Amount Paid RAL (1) (2) (2)/(1) (3) (4) (4)/(3) (3)-(4) 2300 Stationery and Office Supplies , ,02 98,36% , ,36 65,96% ,66 Total Article , ,02 98,36% , ,36 65,96% , Bank Charges 9.000, ,00 100,00% 9.000, ,03 82,51% 1.573, Other Financial Charges , ,00 10,53% , ,93 9,13% 266,07 Total Article , ,00 39,29% , ,96 32,71% 1.840, Legal Expenses , ,00 33,29% ,00 0,00 0,00 % ,00 Total Article , ,00 33,29% ,00 0,00 0,00 % , MB and Other Internal Meeting Expenses , ,83 63,64% , ,06 61,69% 1.361, Department Removals , ,00 84,01% , ,60 33,09% 8.146, Representation Costs , ,26 24,38% , ,05 23,11% 381,21 Total Article , ,09 56,29% , ,71 47,77% 9.889,38 Total Chapter , ,11 64,53% , ,03 44,05% , Postage and Delivery Charges , ,89 82,86% , ,47 75,30% ,42 Total Article , ,89 82,86% , ,47 75,30% , Telephone, Telegraph, Telex, Radio and Television Subscriptions and Charges , ,29 64,03% , ,77 54,70% , Telecommunication Equipment and Installations ,00 0,00 0,00 % ,00 0,00 0,00 % 0,00 Total Article , ,29 57,90% , ,77 49,46% ,52 Total Chapter , ,18 68,90% , ,24 60,85% ,94 Total Title , ,39 88,51% , ,28 54,38% ,11

31 Budget Execution C1: Commitment Appropriation Transaction Amount Payment Appropriation Transaction Amount Budget Line Budget Line Description Executed Commitment % Executed Payment % Position Amount Committed Amount Paid RAL (1) (2) (2)/(1) (3) (4) (4)/(3) (3)-(4) 3000 Certification Activities , ,18 70,72% , ,49 45,82% , JAA Contract , ,00 74,36% , ,00 0,95% , Library , ,64 97,33% , ,64 97,33% 0,00 Total Article , ,82 70,85% , ,13 43,27% ,51 Total Chapter , ,82 70,85% , ,13 43,27% , Q&S Activities ,00 0,00 0,00 % ,00 0,00 0,00 % 0, Q&S Studies ,00 0,00 0,00 % ,00 0,00 0,00 % 0, Library 6.000,00 0,00 0,00 % 6.000,00 0,00 0,00 % 0, Total Article ,00 0,00 0,00 % ,00 0,00 0,00 % 0,00 Total Chapter ,00 0,00 0,00 % ,00 0,00 0,00 % 0, Certification Process Regulation Database , ,89 97,24% , ,89 20,71% , Database Development , ,10 98,19% ,00 950,70 1,00% , Other Software ,00 0,00 0,00 % ,00 0,00 0,00 % 0,00 Total Article , ,99 94,26% , ,59 17,04% ,40 Total Chapter , ,99 94,26% , ,59 17,04% , Information and Publication , ,88 63,78% , ,81 39,93% ,07 Total Article , ,88 63,78% , ,81 39,93% ,07 Total Chapter , ,88 63,78% , ,81 39,93% , Meeting Expenses Certification , ,97 37,29% , ,97 15,89% , Meeting Expenses Q&S , ,22 41,89% , ,26 14,42% 2.746, Meeting Expenses Rulemaking , ,11 52,02% , ,55 9,53% , Meeting Expenses Executive Directorate , ,69 43,10% , ,69 43,10% 0,00 Total Article , ,99 44,05% , ,47 19,26% ,52 Total Chapter , ,99 44,05% , ,47 19,26% , Translation Costs Q&S ,00 0,00 0,00 % ,00 0,00 0,00 % 0, Translation Costs Rulemaking , ,74 86,55% , ,74 47,39% ,00 Total Article , ,74 69,80% , ,74 38,22% ,00 Total Chapter , ,74 69,80% , ,74 38,22% ,00

32 Budget Execution C1: Commitment Appropriation Transaction Amount Payment Appropriation Transaction Amount Budget Line Budget Line Description Executed Commitment % Executed Payment % Position Amount Committed Amount Paid RAL (1) (2) (2)/(1) (3) (4) (4)/(3) (3)-(4) 3600 Outsourcing of Rulemaking Activities , ,50 12,52% , ,50 3,10% ,00 Total Article , ,50 12,52% , ,50 3,10% ,00 Total Chapter , ,50 12,52% , ,50 3,10% , Mission Expenses Certification , ,91 67,97% , ,00 49,15% , Mission Expenses Q&S , ,32 47,27% , ,02 31,16% , Mission Expenses Rulemaking , ,59 85,51% , ,95 65,73% , Mission Expenses Executive Directorate , ,10 80,48% , ,02 63,77% ,08 Total Article , ,92 68,67% , ,99 50,14% , Total Chapter , ,92 68,67% , ,99 50,14% , Technical Training Q&S ,00 0,00 0,00 % ,00 0,00 0,00 % 0, Technical Training Rulemaking , ,95 84,19% , ,95 84,19% 0,00 Total Article , ,95 31,57% , ,95 31,57% 0,00 Total Chapter , ,95 31,57% , ,95 31,57% 0,00 Total Title , ,79 68,98% , ,18 39,80% ,43 GRAND TOTAL , ,11 77,39% , ,56 65,11% ,37