1. Significant accounting policies
The Center for the Study of Democracy (CSD) is a non
profit organization domiciled in Bulgaria. The financial statements
were authorized for issue by the President on 2 April 2002.
(a) Activity background
Founded in late 1989, the Center for Study of
Democracy (CSD) is an interdisciplinary public policy institute
dedicated to the values of democracy and market economy. CSD is a
non-partisan, independent organization fostering the reform process
in Bulgaria through impact on policy and civil society.
CSD objectives are:
-  to provide an enhanced institutional and
policy capacity for a successful European Integration process;
-  to promote institutional reform and the
practical implementation of democratic values in legal and economic
practice;
-  to monitor public attitudes and serve as well
as to monitor the institutional reform process in the country;
-  to strengthen the institutional and
management capacity of NGOs in Bulgaria, and reform the legal
framework for their operation.
CSD encourages an open dialogue between scholars and
policy makers and promotes public-private coalition building. As a
full-service think tank, the Center achieves its objectives through
policy research, process monitoring, drafting of legislation,
dissemination and advocacy activities, building partnerships, local
and international networks.
(b) Statement of compliance
The financial statements of the Center for the study
of democracy (CSD) have been prepared in accordance with the
international accounting standards (IAS) adopted by the
International Accounting Standards Board (IASB), interpretations
issued by the Standing Interpretations Committee of the IASB, and
the requirements of the Bulgarian law.
(c) Basis of preparation
These financial statements have been drawn up in
conformity with International Accounting Standards. The financial
statements are presented in BGN. In the last several years the CSD
has operated in a hyper-inflationary environment. The officially
published by National Institute of Statistics inflation indices for
1996, 1997, 1998, 1999, 2000 and 2001 are 410.8%, 678.6%, 101%,
106.4% ,111.4% and 104.8% respectively.
Hyperinflation adjustments have been made in order
to show the effect of inflation on the purchasing power of the
equity interest as at 31 December 1998. Due to the insignificant
inflation growth in the financial years ended 1999, 2000 and 2001,
the Statement of Revenues, Expenditure and Changes in Fund Balances
for that years and the Balance Sheet as at 31 December 1999, 31
December 2000 and 31 December 2001 have not been adjusted according
the official inflation index.
(d) Foreign currencies
Monetary assets and liabilities in foreign
currencies have been revalued on a monthly basis. The resulting
translation difference is recognised in Statement of revenues,
expenditures and changes in fund balances. The BNB official
exchange rates of the USD as at 31 December 1999 is 1.9469 as at 31
December 2000 is 2.1091 BGN/USD and as at 31 December 2001 is
2.21926 BGN/USD and the average exchange rate for the year 2001 is
2.18467 BGN/USD.
(e) Property, plant and equipment
Items of Property, plant and equipment and
intangible fixed assets are stated at a cost less accumulated
depreciation and are presented at the Balance Sheet applying
International Accounting Standard 29 Financial reporting in
hyperinflationary economies. The monthly inflation indices (refer
to l.b) have been used. Their cost have been inflated as at 31
December 1998. Property plant and equipment and intangible fixed
assets have not been inflated for the years ended 31 December 1999
and 31 December 2000 and 31 December 2001. The inflation rate for
the twelve months ended 31 December 1999, 31 December 2000 and 31
December 2001 of 6.4 %, 11.4% and 4.8% respectively are considered
insignificant, and no restatement of the financial statements as of
and for the year ended 31 December 1999, 31 December 2000 and 31
December 2001 have been made.
Inflated values as at 31 December 1998 of property
plant and equipment and of intangible fixed assets have been
depredated using the straight line method. The rates of depredation
used are as follows:
Buildings
|
4%
|
Machinery and equipment
|
20%
|
Fixtures and fittings
|
25%
|
Vehicles
|
15%
|
Intangible assets
|
20%
|
(f) Investments
Investments classified as long-term assets are
carried at cost, less any amounts written off to recognise a
decline in the value of the investment. The subsidiaries perform
economic activity which is different from the activities performed
by the CSD. In relation to the stated above, the financial
statements of the subsidiaries are not consolidated and the
management carries the investments at cost. In the present report
there is an information disclosed (refer to note 8) for the
activities of these subsidiaries concerning their net assets and
financial results.
(g) Receivables
Receivables are stated at their cost less impairment
losses.
(h) Cash and cash equivalents
Cash and cash equivalents consist of cash on hand
and balances with banks.
(j) Impairment
The carrying amount of the Center's assets are
reviewed at each balance sheet to determine whether there is any
indication of impairment. If any such indication exists, the
asset's recoverable amount is estimated. For intangible assets that
are not yet available for use, the recoverable amount is estimated
at each balance sheet date. An impairment loss is recognised
whenever the carrying amount of an asset or its cash-generating
unit exceeds its recoverable amount. Impairment losses are
recognised in the income statement.
(k) Payables
Payables are stated at their cost.
(l) Revenue recognition and expense reporting
Revenue is recognized in the income and expenditure
account on the basis of completed stage as reported by the CSD to
the commissioning bodies. Revenue is recognized as income for the
period to match the related costs, on a systematic basis. Project
contracts are denominated in foreign currency, while the related
expenses are incurred in BGN.
The revenue of the Center for the Study of Democracy
consists of funds extended by international financing bodies for
the completion of accepted projects. The amounts are carried in the
balance sheet as deferred revenue at their historic values. Every
project is commenced with a signing of a contract where the
financing body determines the budget, payment installments and the
rates at which expenses incurred in BCN are to be translated into
the respective foreign currency.
Reports are issued as contracted with financing
organization. Respective amount of BGN expenses are translated at
the specified rate and an expense report in foreign currency is
produced. It is used to report on the progress of the project
before the financing organization. Frequency is determined in the
contract for the project assignment.
(m) Taxation
CSD is a non profit organization. No corporate tax
is levied in accordance with current Bulgarian legislation. For the
period ended 31 December 2001 there are no trade operations on
which tax is due. Therefore International Accounting Standard 12
Income Taxes is not applied.
2. Revenue fom grants, contributions
and projects
In BGN
|
2001
|
2000
|
IDLI - Coalition 2000
|
65,594
|
1,943,758
|
SELDI - phase I
|
533,454
|
236,547
|
SELDI - phase II
|
307,862
|
-
|
Council of Europe
|
113,970
|
104,475
|
InfoDev - World Bank
|
159,677
|
-
|
MSI
|
66,630
|
-
|
CIPE 2000
|
63,046
|
-
|
Santander Group - Phare Democracy Program
|
80,986
|
-
|
CIPE Mass Media
|
34,597
|
-
|
USAID Conference
|
56,658
|
-
|
UNDP
Training |
-
|
5,388
|
CIPE 1999 |
-
|
79,809
|
The German
Marshall Fund |
49,412
|
53,350
|
Mc Arthur
Foundation |
-
|
137,433
|
Other projects
|
301,925
|
520,108
|
|
1,853,775
|
3,080,868
|
Income from
fiancing NCA |
40,932
|
17,472
|
|
1,894,707
|
3,098,340
|
3. Expenses on grants, contributions and
projects
In BGN |
2001
|
2000
|
Salaries and
benefits |
71,741
|
106,481
|
Hired services |
928,492
|
1,416,144
|
Depreciation |
48,375
|
43,335
|
Supplies and
consumable |
92,873
|
142,529
|
Other expenses |
659,350
|
325,757
|
|
1,520,860
|
2,367,839
|
Expenses for hired services include expenses for
honoraria of external personnel and the related social security and
health insurance contributions, courier and printing services,
telephone expenses, utilities.
4. Foreign exchange gains - net
In BGN
|
2001
|
2000
|
Exchange rate
gains from operations |
328,576
|
350,723
|
Exchange rate losses from operations
|
(322,241)
|
(187,844)
|
|
6,335
|
162,879
|
5. Impairment losses
In BGN
|
2001
|
2000
|
Balance at the beginning of the year
|
-
|
20,873
|
Impairment losses incurred /(reversed)
during the period
|
19,611
|
(11,306)
|
Write off receivable against impairment
loss incurred in previous years
|
-
|
(9,567)
|
Balance at
the end of the year |
19,611
|
-
|
Total
increase/ (decrease) of impairment
losses
|
19,611
|
(11,306)
|
6. Property, plant and equipment
In BGN
|
Land and buildings
|
|
Plant & equipment
|
Vehicles
|
Fixtures & fittings
|
Under
construction
|
Total
|
Cost
|
Balance at 1 January 2001
|
115,769
|
|
178,213
|
149,027
|
90,735
|
335,923
|
869,667
|
Acquisitions
|
113,893
|
|
4,664
|
26,089
|
5,085
|
-
|
149,731
|
Balance at 31 December 2001
|
229,662
|
|
178,213
|
175,116
|
95,820
|
335,923
|
1,019,398
|
Depreciation and impairment losses
|
Balance at 1 January 2001
|
-
|
|
48,680
|
109,188
|
87,817
|
-
|
245,685
|
Depreciation charge for the year
|
1,433
|
|
35,927
|
7,466
|
924
|
-
|
45,750
|
Balance at 31 December 2001
|
-
|
|
46,680
|
109,188
|
87,817
|
-
|
245,685
|
Carrying amount
|
At 1 January 2001 |
115,769
|
|
129,533
|
39,839
|
2,918
|
335,923
|
623,982
|
At 31 December 2001
|
228,229
|
|
98,270
|
58,462
|
7,079
|
335,923
|
727,963
|
7. Intangible fixed assets
In BGN
|
Software
|
Patents and licenses
|
Total
|
Cost
|
Balance at 1 January 2001
|
13,228
|
412
|
13,640
|
Acquisitions
|
-
|
-
|
-
|
Balance at 1 January 2001
|
13,228
|
412
|
13,640
|
Amortisation and impairment losses
|
Balance at 1 January 2001
|
1,542
|
412
|
1,954
|
Amortisation charge for the year
|
2,625
|
-
|
2,625
|
Balance at 31 December 2001
|
4,167
|
412
|
4,579
|
Carrying
amount |
At 1 January 2001
|
11,686
|
-
|
11,686
|
at 31 December 2001
|
11,686
|
-
|
11,686
|
8. Investments
In BGN |
2001
|
2000
|
Agency Vitosha EOOD |
5,006
|
5,006
|
Vitosha Research |
5,000
|
5,000
|
|
10,006
|
10,006
|
CSD is a non-profit organisation which has invested
in two companies in prior accounting periods. For the financial
year 2001 the subsidiaries that perform business activities in line
with the overall goals and the mission of CSD have received no
further financial support. Their financial statements have been
audited by certified chartered accountants according to Bulgarian
legislation, for which some details are presented below:
In thousands of BGN |
Net Assets
|
Profit After Tax
|
Agency Vitosha EOOD |
43
|
4
|
Vitosha Research |
26
|
18
|
9. Receivables
In BGN |
2001
|
2000
|
Completed Projects
|
50,777
|
579,075
|
Other receivables
|
23,863
|
34,247
|
Important Losses
|
(19,611)
|
-
|
|
55,029
|
613,322
|
10. Cash and cash equivalents
In BGN |
2001
|
2000
|
In local currency
|
50,050
|
49,228
|
In foreign currency |
2,280,695
|
1,473,055
|
Deposits
|
800
|
800
|
At Bank
|
2,331,545
|
1,523,083
|
In local currency
|
14,779
|
12,406
|
In foreign currency
|
40,284
|
9,372
|
In hand |
55,063
|
21,778
|
|
2,386,608
|
1,544,861
|
11. Deferred expenses
In BGN |
2001
|
2000
|
The German Marshall Fund
|
24,431
|
-
|
Euro Barometer
|
10,799
|
-
|
Office of Research
|
6,150
|
-
|
CIPE 2000
|
-
|
43,468
|
Urban Institute
|
-
|
16,892
|
COLPI
|
-
|
8,729
|
OSF
|
-
|
5,198
|
OSF - Book Donation
|
-
|
15,238
|
Santander Group - Phare
Democracy Program |
-
|
85,601
|
GMF
|
-
|
49,971
|
IMSI |
-
|
787
|
Other Projects
|
353
|
352
|
|
41,733
|
226,235
|
Since revenue and expenses on projects are matched
on a yearly basis to conform with the accruals principle, deferred
expenses consisting of expenses incurred on projects that have not
been completed arise.
12. Payables
In BGN |
2001
|
2000
|
Payables to the budget |
11,577
|
16,391
|
Salaries, benefits and social security
payable |
13,350
|
16,047
|
Payable to suppliers |
14,893
|
1,441
|
Payable related to VISA credit
cards |
-
|
3,095
|
Other payables |
14,879
|
23,693
|
|
54,699
|
60,667
|
13. Deferred revenue
In BGN |
2001
|
2000
|
For project activities |
79,369
|
135,922
|
For fixed assets |
120,189
|
156,458
|
|
199,558
|
292,380
|
14. Related parties
Related party receivables
|
Nature of the related party
relationship
|
Transaction during the year
|
Amount
|
Outstanding balance
31 December 1999
|
Agency Vitosha
|
100% of the capital owned by CSD
|
Paid off financing
|
5,889.17 BGN
|
-
-
|
15. Events subsequent to the balance sheet
date
There have been no material changes or transactions
subsequent to the balance sheet date that require adjustment or
disclosure in the financial statements prepared for the period
ended 31 December 2001.
16. Contingencies
As expenses under project InfoDev are included VAT
expenses for the amount of BGN 2,751 and expenses for social
security and health insurance contributions on salaries for the
amount of BGN 8,319. According to the terms of the agreement for
financing it is possible for those expenses not to be approved, and
as a result a contingent liability could arise for the amount of
BGN 11,070.
|