RESTRICTED
WORLD TRADE G/SCM/Q2/POL/7
22April 1998
ORGANIZATION(98-1603)
Original: English Committee onSubsidies andCountervailing Measures
SUBSIDIES
Reply toFollow-up Question from theUNITED STATES1
Regarding theNewandFullNotification ofPOLAND2
Thefollowing communication, dated 17April 1998 hasbeenreceived from thePermanent
Mission ofPoland.
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Q. Follow-up towritten USquestion 14
Could Poland elaborate onwhatismeant bythestatement that"investment grants" support
the"investment process," butthattheydonotincrease thecapital oftherelevant enterprise?
Please provide aspecific explanation orillustration ofthepurpose androleofsuchgrants and
themanner inwhich they"support theinvestment process".
A. Entities inthehardcoalindustry havelegalforms oflimited liability companies orjointstock
companies. Inconformity withthebinding regulations, theirequity iscomposed of:
- owncapital (stockholders 'equity orshares);
- spare capital;
- reserve capital.
Enlargement ofacompany 'scapital canbebrought about inconformity withtheprovisions
oftheCommercial Code through:
- emission ofnewshares inthecaseofstockholders 'owncapital;
- creating newshares inthecompany 'sstock orincreasing thevalue ofthealready
existing ones;
- allowances from netprofit.
1G/SCM/Q2/POL/6.
2G/SCM/N/3/POL-G/SCM/N/16/POL.
./.G/SCM/Q2/POL/7
Page2
Budget investment grants arethefinancial support toinvestment process buttheydonothave
impact ontheabove-mentioned capitals ofenterprises. Thedifficult financial situation ofcoalmines
results inthelackofsufficient amount offreeresources needed forcontinuation ofinitiated investments.
Statebudget grants supplement thoseresources onlyinthecaseofthemostimportant investment
programmes.
Each completed investment increases fixed assets ofanenterprise while statebudget grant is
settled ininstalments ofavalue uptoannual deprecation ratesasother operational income thusaffecting
thefinancial result.
Current regulations relating toaccountancy, aswellasCommercial Code, donotpermit in
suchcases toincrease subject 'sowncapital being reflected ontheliabilities sideofthebalance sheet.
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