ANNUAL REPORT ARCELOR 2003 - paperJam

Notes to the annual accountsNOTE 1 – GENERALArcelor S.A. was incorporated under Luxembourg Lawon June 8, 2001 for an unlimited period in the context ofthe business combination of the Aceralia, Arbed andUsinor groups that was completed on February 28,2002.The registered office of the Company is in LuxembourgCity and the Company is registered at the Register ofTrade and Commerce of Luxembourg under the numberB 82.454.The accounting period starts on January 1 and ends onDecember 31 each year.The Company publishes consolidated accounts inaccordance with the requirements of Luxembourg lawsand regulations.NOTE 2 – ACCOUNTING POLICIESThe annual accounts are prepared in euro (“EUR”) andin accordance with Luxembourg laws and regulationsand generally accepted accounting principles.Tangible fixed assetsTangible fixed assets are recorded in the balance sheetat cost, including ancillary costs, or at production cost.Depreciation is calculated on a straight-line basis.Intangible fixed assetsInvestments are recorded in the balance sheet atacquisition cost, plus ancillary costs.At the end of each accounting period, all investmentsare subject to an impairment review. Where a permanentdiminution in value is recognised this diminution isrecorded in the income statement as a value adjustment.The reversal of a value adjustment is recorded to theextent that the factors, which caused the initial recordingof the value adjustment, have ceased to exist.Debts and other loans receivable are recorded in thebalance sheet at their nominal value. At the end of eachaccounting period specific value adjustments arerecorded on debts that appear to be partly or whollyirrecoverable.DebtorsDebtors are recorded in the balance sheet at theirnominal value.At the end of each accounting period specific valueadjustments are recorded on debts that appear to bepartly or wholly irrecoverable.Provisions for liabilities and chargesProvisions are made for liabilities and charges where thecrystallisation of a liability is considered probable, basedon past or current events, in line with legal requirements.> Provisions for pensions and similar obligations:The Company participates in the financing of an incrementalretirement scheme (defined benefit scheme) for thebenefit of employees made available by Arbed S.A.Commitments arising out of this scheme are covered byappropriate provisions.The Company’s own employees, who are not madeavailable to other companies, are covered by a definedcontribution scheme. The Company pays contributionsin respect of this scheme to an assurance provider. Thisscheme does not give rise to a commitment and annualcontributions are taken to the profit and loss account,following the same treatment as that adopted for wagesand salaries.CreditorsCreditors are recorded in the balance sheet at theirnominal value. Convertible debenture loans are disclosedat their issue value, increased by the interest to becapitalised on December 31 of each accounting year.Translation of foreign currency itemsWhere applicable, items expressed in foreign currencyare valued as follows:Tangible fixed assets, creditors due after more than oneyear and off-balance sheet commitments are translatedat historic exchange rates. Unrealised losses incurred asa result of this policy are recorded in the profit and lossaccount for the period.Other balance sheet items are translated at the year-endexchange rates and related foreign exchange differencesare recorded in the profit and loss account for the period.financial information > annual accountsANNUAL REPORT ARCELOR 2003 195