COMMISSION DECISION
of 18 December 2012
on the adoption of the Rules to ensure consistent verification of the existence and legal status of participants, as well as their operational and financial capacities, in indirect actions supported through the form of a grant under the Seventh Framework Programme of the European Community for research, technological development and demonstration activities and under the Seventh Framework Programme of the European Atomic Energy Community for nuclear research and training activities
(Text with EEA relevance)
(2012/838/EU, Euratom)
Article 1
Article 2
Article 3
ANNEX
FOREWORD
GENERAL PURPOSE
1. VERIFICATION OF THE LEGAL EXISTENCE AND LEGAL STATUS/CATEGORY
1.1.
Principles
1.1.1.
Confidentiality and protection of data
1.1.2.
Legal Existence
1.1.3.
Legal status according to the Rules for Participation for FP7 (Categories of legal entities)
Natural person (11) |
||
Legal person |
Public body |
|
Profit |
Non-profit public body |
|
Profit public body |
||
International Organisation |
Of European Interest |
|
Other |
||
Secondary and Higher education Establishment |
||
Research Organisation |
||
Enterprise |
SME |
|
Non-SME |
1.1.3.1.
Definitions
1.1.4.
Requested data and documents
1.1.5.
Effective date of the legal existence and the legal status/category
1.2.
Implementation of the verification of legal existence and legal status/category
1.2.1.
Provisions regarding cases of incomplete, contradictory or false declarations and/or supporting documents
1.2.2.
Information on the outcome of the validation and the validated ‘Participant Identification Code’ (PIC)
1.2.3.
Declaration on the correctness of the basic data in the Grant Preparation Form
1.2.4.
Legal Entity Appointed Representative (LEAR)
1.2.5.
Modification of validations
1.2.5.1.
Modifications of validations due to an error of the initial validation
1.2.5.2.
Modifications of validations due to a change of the legal existence and legal status/category
1.2.5.3.
Changes of the indirect cost method (ICM)
(1) Changes of the legal status of the participant
1.2.6.
Administrative review of validations
1.2.7.
The Validation Panel
2. VERIFICATION OF THE OPERATIONAL CAPACITY
2.1.
Principles
2.2.
Implementation
2.2.1.
At proposal stage
2.2.2.
At negotiation stage
3. VERIFICATION OF THE FINANCIAL CAPACITY: RULES OF IMPLEMENTATION
3.1.
Principles
3.2.
Reasons for a concise financial analysis as a general rule
3.3.
Categories of legal entities subject to (or exempted from) a verification of their financial capacity
Decision tree on financial capacity verification
3.4.
Requested data and documents
3.4.1.
Legal persons
3.4.2.
Natural persons
3.4.3.
Other remarks
3.5.
Financial viability check
3.5.1.
Purpose
3.5.2.
Used ratios and noteworthy value
Purpose |
Indicators |
Ratios |
Concise Analysis |
Liquidity |
Quick ratio |
[Bild bitte in Originalquelle ansehen] |
— |
Profitability |
Profitability (1) |
[Bild bitte in Originalquelle ansehen] |
— |
Solvency |
Solvency |
[Bild bitte in Originalquelle ansehen] |
— |
Equity flag
3.5.3.
Thresholds
Purpose |
Indicators |
Weak |
Acceptable |
Good |
0 |
1 |
2 |
||
Liquidity |
Quick ratio |
i < 0,5 |
0,5 ≤ i ≤ 1 |
i > 1 |
Profitability |
Profitability (1) |
i < 0,05 |
0,05 ≤ i ≤ 0,15 |
i > 0,15 |
Solvency |
Solvency |
i > 6,00 or < 0 |
6,00 ≥ i ≥ 4,00 |
i < 4,00 and ≥ 0 |
3.5.4.
Particular case of natural persons
3.5.4.1.
Used ratios
Purpose |
Indicators |
Ratios |
Liquidity |
Quick ratio |
[Bild bitte in Originalquelle ansehen] |
Solvency |
Solvency |
[Bild bitte in Originalquelle ansehen] |
3.5.4.2.
Thresholds
Purpose |
Indicators |
Weak |
Acceptable |
Good |
0 |
1,5 |
3 |
||
Liquidity |
Quickratio |
i < 2 |
2 ≤ i ≤ 3 |
i > 3 |
Solvency |
Solvency |
i > 1 |
1 ≥ i ≥ 0,5 |
i < 0,5 |
3.6.
Co-financing capacity check
3.6.1.
Purpose
3.6.2.
Used ratios and noteworthy value
Purpose |
Indicators |
Ratios |
Co-financing capacity |
[Bild bitte in Originalquelle ansehen] |
|
[Bild bitte in Originalquelle ansehen] |
Financial exposure flag:
3.6.3.
Thresholds
Purpose |
Indicators |
Weak |
Good |
0 |
1 |
||
Co-financing capacity |
Cash Flow Indicator |
< 1 |
> = 1 |
Net Operating Profit Indicator |
< 1 |
> = 1 |
3.6.4.
Particular case of natural persons
3.6.4.1.
Used ratios
Purpose |
Indicators |
Ratios |
Co-financing capacity |
Short term |
[Bild bitte in Originalquelle ansehen] |
Medium/Long Term |
[Bild bitte in Originalquelle ansehen] |
3.6.4.2.
Thresholds
Purpose |
Indicators |
Weak |
Good |
0 |
1 |
||
Co-financing capacity |
Short Term |
< 1 |
> = 1 |
Medium/Long Term |
< 1 |
> = 1 |
4. VERIFICATION OF THE FINANCIAL CAPACITY: CONCLUSION OF THE ANALYSIS (CHECKS) AND POSSIBLE MEASURES TO BE TAKEN
4.1.
Assessment of the results of the concise analysis
|
Weak |
Acceptable |
Good |
Result of financial viability check |
0-2 |
3 |
4-6 |
4.2.
Actions to be taken in case of ‘weak’ result
4.2.1.
A more in-depth financial analysis
4.2.1.1.
For legal persons
Purpose |
Indicators |
Ratios |
More in depth analysis |
Liquidity |
Quick ratio |
[Bild bitte in Originalquelle ansehen] |
— |
Financial autonomy |
Gross Operating Profit Ratio |
[Bild bitte in Originalquelle ansehen] |
— |
Profitability |
Profitability (1) |
[Bild bitte in Originalquelle ansehen] |
— |
Profitability (2) |
[Bild bitte in Originalquelle ansehen] |
— |
|
Solvency |
Solvency |
[Bild bitte in Originalquelle ansehen] |
— |
Correction: Gross Operating Profit Ratio is calculated as: Interest paid/GOP. |
Purpose |
Indicators |
Weak & Unsufficient |
Acceptable |
Good |
0 |
1 |
2 |
||
Liquidity |
Quick ratio |
i < 0,5 |
0,5 ≤ i ≤l |
i > 1 |
Financial autonomy |
Gross Operating Profit Ratio |
i > 0,40 or < 0 |
0,40 ≥ i ≥ 0,30 |
0 ≤ i ≤ 0,30 |
Profitability |
Profitability (1) |
i < 0,05 |
0,05 ≤ i ≤ 0,15 |
i > 0,15 |
Profitability (2) |
i < 0,02 |
0,025 ≤ i ≤ 0,04 |
i > 0,04 |
|
Solvency |
Solvency |
i > 6,00 or < 0 |
6.00 ≥ i ≥ 4,00 |
0 ≤ i < 4,00 |
|
Insufficient |
Weak |
Acceptable |
Good |
Result of financial viability check |
0 |
1-3 |
4-5 |
6-10 |