Report of the Court of Auditors of the European Communities on the financial statements of the European Coal and Steel Community as at 31 December 1992



Official Journal C 220 , 14/08/1993 P. 0030



FINANCIAL STATEMENTS OF THE EUROPEAN COAL AND STEEL COMMUNITY AT 31 DECEMBER 1992 AND 31 DECEMBER 1991 (93/C 220/03) In accordance with undertakings given by the Commission on behalf of the ECSC with regard to its borrowing activities, the following financial statements, drawn up in conformity with Article 78 of the Treaty establishing the ECSC, are published: - balance sheets of the European Coal and Steel Community at 31 December 1992 and 31 December 1991, - profit-and-loss accounts for the years ending 31 December 1992 and 31 December 1991, - allocation of the surplus for the years ending 31 December 1992 and 31 December 1991. These financial statements are accompanied by the report of the Court of Auditors provided for under Article 78f (5) of the ECSC Treaty, dealing with the financial operations of the ECSC for 1992 with the exception of those relating to revenue and expenditure of an administrative nature. Balance sheets at 31 December 1992 and 31 December 1991 (amounts in ecus) - before allocation of surplus - ASSETS 31 December 1992 31 December 1991 Balances with central banks (note 3) 530 675 1 081 028 Loans and advances to credit institutions (note 4): - repayable on demand - with agreed maturity dates or periods of notice - loans 56 203 772 651 975 632 3 433 388 311 34 036 866 803 286 645 3 239 875 489 Total 4 141 567 715 4 077 199 000 Loans and advances to customers (note 5): - loans - levy - fines 4 267 090 339 14 719 767 1 615 162 4 276 210 661 13 845 058 1 754 070 Total 4 283 425 268 4 291 809 789 Bonds and other fixed-income securities (note 6): - issued by public bodies - issued by other borrowers (including own-debt securities: 67 638 521 in 1992 and 88 954 023 in 1991) 1 220 874 572 267 724 137 1 069 105 622 244 402 965 Total 1 488 598 709 1 313 508 587 Tangible and intangible assets (note 7) 6 523 098 6 021 801 Other assets (note 8) 7 696 871 10 722 601 Prepayments and accrued income (note 9) 342 872 269 335 432 183 TOTAL ASSETS 10 271 214 605 10 035 774 989 Off-balance-sheet commitments (note 25) 4 718 395 201 3 793 241 962 - before allocation of profit - LIABILITIES 31 December 1992 31 December 1991 LIABILITIES VIS-A-VIS THIRD PARTIES Amounts owed to credit institutions (note 10): - repayable on demand - with agreed maturity dates of periods of notice - borrowings 5 840 231 - 2 985 338 811 0 85 978 663 2 936 886 431 Total 2 991 179 042 3 022 865 094 Debts evidenced by certificates (note 11) 4 341 279 392 4 202 296 133 Other liabilities (note 12) 365 986 897 107 922 528 Accruals and deferred income (note 13) 284 938 605 284 484 893 Provisions for liabilities and charges (note 14) 5 805 666 7 084 687 Commitments for the ECSC operating budget (note 15) 1 283 153 200 1 288 934 244 TOTAL LIABILITIES VIS-A-VIS THIRD PARTIES 9 272 342 802 8 913 587 579 NET POSITION Provisions for financing the ECSC operating budget (note 16) 307 348 557 385 058 170 RESERVES (note 17): - Guarantee Fund - special reserve - former pension fund 429 885 000 188 980 000 57 469 977 482 885 000 188 980 000 56 150 435 Total 676 334 977 728 015 435 Value adjustment reserve 13 294 511 7 773 845 Surplus brought forward 20 418 166 085 Surplus for the financial year 1 873 340 1 173 875 NET TOTAL 998 871 803 1 122 187 410 TOTAL LIABILITIES 10 271 214 605 10 035 774 989 Off-balance-sheet commitments (note 25) 7 687 872 326 6 057 194 847 Profit-and-loss accounts for the years ending 31 December 1992 and 31 December 1991 (Amounts in ecus) CHARGES 31 December 1992 31 December 1991 Interest payable and similar charges: - interest - issuing costs and redemption premiums 942 239 470 11 540 426 853 945 655 16 185 304 Total 953 779 896 870 130 959 Commissions payable 2 243 917 2 419 396 Net losses on financial operations: - foreign-exchange losses - losses on securities - value adjustments in respect of securities 217 196 3 514 185 0 0 3 163 224 0 Total 3 731 381 3 163 224 Administrative expenses (note 19) 5 000 000 5 000 000 Value adjustments in respect of tangible assets (note 7) 782 977 895 511 Other operating charges (note 20) 572 287 751 705 Value adjustments in respect of loans and advances and provisions for contingent liabilities and for commitments (note 21): - Value adjustment in respect of loans and advances - Allocation to the provision for liabilities and charges (note 14) 92 673 296 355 166 1 000 069 1 946 642 Total 93 028 462 2 946 711 TOTAL OPERATING CHARGES 1 059 138 920 885 307 506 Extraordinary charges 277 845 444 491 Allocation to the reserve for exchange differences 5 520 666 633 848 Legal commitments for the financial year (note 15) 477 217 432 454 375 588 Allocation to the provision for financing the ECSC operating budget (note 16) 235 733 395 313 304 101 TOTAL CHARGES 1 777 888 258 1 654 065 534 Surplus for the financial year 1 873 340 1 173 875 TOTAL 1 779 761 598 1 655 239 409 INCOME 31 December 1992 31 December 1991 Interest receivable and similar income (note 22): - interest (including interest on fixed-income securities: 124 484 602 in 1992 and 125 091 970 in 1991) - issuing and redemption premiums 1 162 894 880 8 824 756 1 081 577 404 12 670 676 Total 1 171 719 636 1 094 248 080 Net profit on financial operations: - foreign-exchange profits - profits on securities - value adjustments in respect of securities 10 8 986 656 318 420 23 286 8 931 669 20 110 244 Total 9 305 086 29 065 199 Value adjustments in respect of loans and advances and provisions: - withdrawal of value adjustments in respect of loans and advances - transfer from the provision for liabilities and charges 1 534 081 1 789 949 10 676 489 324 254 Total 3 324 030 11 000 743 Other operating income (note 23) 1 197 236 720 849 TOTAL OPERATING INCOME 1 185 545 988 1 135 034 871 Conversion difference 5 520 666 633 848 Income relating to the operating budget (note 24) 222 251 936 207 401 206 Transfer from the provision for financing the ECSC operating budget 313 304 101 311 851 569 Transfer from the provision for fines to be collected 138 907 317 915 Transfer from the Guarantee Fund 53 000 000 - TOTAL INCOME 1 779 761 598 1 655 239 409 Allocation of surplus for the years ending 31 December 1992 and 31 December 1991 (Amounts in ecus) 1992 1991 Surplus not allocated at 1 January 20 418 166 085 Surplus for the year to be allocated 1 873 340 1 173 875 1 893 758 1 339 960 Allocation to the former pension fund 1 453 352 1 319 542 Surplus not allocated at 31 December 440 406 20 418 NOTES RELATING TO THE FINANCIAL STATEMENTS AT 31 DECEMBER 1992 AND AT 31 DECEMBER 1991 (Amounts in ecus) 1. PRESENTATION OF THE FINANCIAL STATEMENTS 1.1. The European Coal and Steel Community (ECSC) was established by the Treaty of 18 April 1951. According to the Treaty, the task of the ECSC is to contribute to the economic expansion of the Member States through the establishment of a common market for coal and steel. Most of the ECSC's funds come from the levy, the net profit from its financial activity, borrowings raised on the financial markets and direct bank loans. 1.2. The ECSC's financial statements for 1992 and the notes thereto are presented in accordance with Council Directives 78/660/EEC and 86/635/EEC on the annual accounts and consolidated accounts of banks and other financial institutions (OJ No L 222, 14. 8. 1978 and OJ No L 372, 31. 12. 1986). 1.3. ECSC accounts are kept in the various currencies used for its financial activity. The financial statements are expressed in ecus. The following rates have been used for converting year-end balance-sheet amounts expressed in currency into ecus: 31 December 1992 1991 Belgian and Luxembourg franc German mark Dutch guilder Pound sterling Danish krone French franc Italian lira Irish pound Spanish peseta Portuguese escudo Greek drachma United States dollar Swiss franc Canadian dollar Japanese yen 40,1777 1,9556 2,19669 0,798221 7,57479 6,66782 1 787,42 0,743157 138,648 177,76 260,198 1,2109 1,76307 1,53603 151,06 41,9308 2,03553 2,29352 0,716117 7,92945 6,95338 1 542,40 0,766332 129,668 179,886 235,065 1,34093 1,81763 1,55078 167,549 1.4. At 31 December 1992 the various currencies listed in 1.3. together with the ecu, made up the ECSC's balance sheet as follows: (ECU 1 000) Currency Assets Liabilities Belgian franc Luxembourg franc German mark Dutch guilder Pound sterling Danish krone French franc Italian lira Iris pound Spanish peseta Portuguese escudo Greek drachma United States dollar Swiss franc Canadian dollar Japanese yen ECU 369 203 146 486 3 882 441 264 681 886 553 2 782 1 008 126 1 579 707 1 519 320 522 93 034 3 826 2 356 818 471 103 55 867 133 778 -1 305 231 290 059 126 620 3 764 905 206 164 793 216 - 871 488 1 503 881 0 270 725 89 016 0 2 278 759 457 879 55 867 132 398 -569 762 Total 10 271 215 10 271 215 NB: The ecu has a much larger place in the ECSC's accounts than suggested by the above table. The apparently small share in ecus is explained by certain accounting operations, mainly the offsetting of accounts receivable and payable relating to currency swaps. The offsetting of these items on the assets and liabilities sides is designed to prevent articficial inflation of the balance sheet. This accounting operation is carried out in ecus and involved a total of ECU 3 852 663 317 in 1992. The real weight of the ecu in the ECSC's accounts can therefore be assessed more accurately if this amount is added both to the assets and to the liabilities sides of the balance sheet. 2. ACCOUNTING POLICIES AND METHODS 2.1. General accounting methods 2.1.1. The financial statements are drawn up in accordance with generally recognized accounting principles. 2.1.2. Charges and income for the financial year are entered in currency and converted to ecus at the monthly accounting rate in force on the day of the transaction. 2.2. Change in the accounting method Until 31 December 1991 the ECSC used the net balance from one financial year to finance the operating budget of the following financial year. This involved allocating the year's income to the provision for financing the operating budget under the heading 'Net balance'. On 31 December 1992 this accounting method was changed to enable the operating budget for 1993 to be financed by income received during 1993. The net balance generated by ECSC activity during 1992, ECU 131 636 968, has been allocated to the contingency reserve (note 16). 3. BALANCES WITH CENTRAL BANKS This item represents the ECSC's balances with the central banks of the 12 Member States. 4. LOANS AND ADVANCES TO CREDIT INSTITUTIONS 4.1. Repayable on demand This item also includes loans and advances to Cedel repayable on demand. 4.2. With agreed maturity dates or periods of notice The breakdown of the time to maturity of these loans is as follows: (in ecus) 31 December 1992 1991 Up to three months 382 962 987 421 074 157 Three months to one year 252 956 207 382 212 488 Over one year 16 056 438 - Total 651 975 632 803 286 645 4.3. Loans The breakdown of the time to maturity of these loans is as follows: (in ecus) 31 December 1992 1991 Up to three months 63 235 868 51 050 748 Three months to one year 304 540 293 294 276 498 One year to five years 2 563 278 917 2 217 629 092 Over five years 502 333 233 676 919 151 Total 3 433 388 311 3 239 875 489 5. LOANS AND ADVANCES TO CUSTOMERS 5.1. Loans The loans granted to credit institutions are shown under 'Loans and advances to credit institutions' (see note 4). The other loans break down as follows: (in ecus) 31 December 1992 1991 1. Loans paid from borrowed funds Amounts outstanding, excluding redemption premiums 4 196 379 653 4 085 515 680 Redemption premiums 45 000 000 45 000 000 Value adjustments (40 341 949) (3 781 296) Subtotal 4 201 037 704 4 126 734 384 2. Loans from the special reserve and other own funds for financing subsidized housing 26 832 402 27 468 907 Total I 4 227 870 106 4 154 203 291 The breakdown of the time to maturity of these loans is as follows: 1992 1991 Up to three months 138 465 976 296 273 320 Three months to one year 451 572 667 532 460 889 One year to five years 3 040 617 738 2 735 497 429 Over five years 637 555 674 593 752 949 3. Loans paid from the former pension fund to officials of the European Communities for housing construction 37 514 170 33 422 568 4. Loan repayments overdue and interest on arrears 1 706 063 88 584 802 Grand total 4 267 090 339 4 276 210 661 These loans are usually secured by guarantees from the Member States, banks or companies, or by mortgages. 5.2. Levy Before value adjustment, this item amounts to ECU 20 195 663 of 31 December 1992 (ECU 18 687 124 at 31 December 1991). It comprises in particular ECU 4 366 705 subject to legal proceedings (ECU 3 988 246 at 31 December 1991) and ECU 2 382 399 relating to temporary deferment in respect of coal in stock (ECU 1 101 482 at 31 December 1991). Payment of the levy in respect of coal in stock is temporarily deferred under a general decision taken in 1972. 5.3. Fines After value adjustment the item 'Fines receivable' amounts to ECU 1 615 162 (ECU 1 754 070 at 31 December 1991). 6. BONDS AND OTHER FIXED-INCOME SECURITIES 6.1. Valuation Bonds and other fixed-income securities are valued at average purchase price or market value at 31 December 1992, whichever is the lower. This principle is not applied in the case of securities considered as financial fixed assets (see 6.5). 6.2. Composition Bonds and other fixed-income securities break down as follows: (in ecus) Value adjustments on securities (Withdrawal) 31 December 1992 1991 ISSUED BY PUBLIC BODIES - Gross vulue - Value adjustment (707 422) 1 228 444 178 (7 569 606) 1 077 382 650 (8 277 028) - Net value 1 220 874 572 1 069 105 622 OWN-DEBT SECURITIES - Gross value - Value adjustment - 67 638 521 - 88 954 023 - - Net value 67 638 521 88 954 023 ISSUED BY OTHER BORROWERS - Gross value - Value adjustment 389 002 201 417 847 (1 332 231) 156 392 171 (943 229) - Net value 200 085 616 155 448 942 TOTAL - Gross value - Value adjustment (318 420) 1 497 500 546 (8 901 837) 1 322 728 844 (9 220 257) - Net value 1 488 598 709 1 313 508 587 6.3. Maturities in 1993 Securities in the portfolio reaching final maturity during 1992 represent the following amounts (in ecus): - issued by public bodies: 197 199 472 - own-debt securities: 141 380 - issued by other borrowers: 39 784 660 Total 237 125 512 6.4. Listed/unlisted securities The securities portfolio comprises ECU 1 406 700 893 of securities with a stock-exchange listing, the balance of ECU 81 897 816 being unlisted securities. 6.5. Financial fixed assets 6.5.1. Financial fixed assets are defined as securities that will remain in the portfolio until their final maturity. They comprise mainly short-term papers and own-debt securities repurchased for servicing ECSC borrowings. 6.5.2. Financial fixed assets are valued at average purchase price or redemption value, whichever is the lower. The redemption value of these securities exceeds the average purchase price by a total of ECU 9 498 106. 6.5.3. Financial fixed assets are made up as follows (in ecus): - issued by public bodies: 57 759 076 - own-debt securities: 67 638 524 - issued by other borrowers: 6 827 125 Total 132 224 725 7. TANGIBLE AND INTANGIBLE ASSETS (in ecus) Year of acquisition Acquisition price 31 December 1992 1991 Tangible assets: - Paris buildings - Washington buildings - Lisbon buildings - New York buildings - Canberra buildings - Marseille buildings - Windhoek buildings 1990 1971 1986 1987 1987 1991 1992 8 804 938 882 654 1 265 526 2 132 944 2 350 603 406 679 1 129 004 1 470 688 759 240 1 399 910 1 941 869 338 899 1 072 554 1 529 524 843 600 1 539 901 2 136 056 372 789 - 5 983 161 5 421 871 Intangible assets: - Lease on Milan buildings 1986 879 883 539 937 599 930 Total tangible and intangible assets 6 523 098 6 021 801 The Paris buildings are owned jointly by the three Communities, the ECSC's share being 28 %. The other buildings, which are owned solely by the ECSC, are let to the Commission; the rent paid provides a return on the funds invested by the ECSC and amortizes the debt. When these buildings have been fully amortized, ownership will be transferred to the European Economic Community. In 1992 the ECSC purchased three buildings in Windhoek, Namibia. 8. OTHER ASSETS (in ecus) 31 December 1992 1991 Loans, payments due and not received 55 836 021 4 992 807 Portfolio taxes and VAT to be reclaimed 2 672 333 2 577 892 Loans to officials - miscellaneous 2 789 139 5 713 640 Miscellaneous 2 047 886 1 176 995 63 345 379 14 461 334 Cumulative value adjustments (55 648 508) (3 738 733) Total 7 696 871 10 722 601 The increase in 'Loans, payments due and not received' and 'Value adjustments' is connected with the deterioration in the financial situation of several major steel companies as a result of the serious crisis which the steel sector has been facing for some time. 9. PREPAYMENTS AND ACCRUED INCOME (in ecus) 31 December 1992 1991 Interest on loans 227 060 112 207 561 591 Interest on deposits and securities portfolio 92 763 512 88 627 521 Levy declared for November and December but payable after 31 December 13 439 131 20 673 918 Issuing costs and redemption premiums 11 949 961 18 569 153 345 212 716 335 432 183 Cumulative value adjustments (2 340 447) - Total after value adjustments 342 872 269 335 432 183 10. AMOUNTS OWED TO CREDIT INSTITUTIONS The time to maturity on these operations is as follows: (in ecus) 31 December 1992 1991 Repayable on demand 5 840 231 - Up to three months 101 126 985 332 641 259 Three months to one year 408 367 924 536 923 621 One year to five years 1 757 000 976 1 495 925 208 Over five years 718 842 926 657 375 006 Total 2 991 179 042 3 022 865 094 11. DEBTS EVIDENCED BY CERTIFICATES Part of the borrowings outstanding at 31 December 1992 will reach maturity during the 1993 financial year. These borrowings amount to ECU 377 215 485. 12. OTHER LIABILITIES (in ecus) 31 December 1992 1991 Exchange value in ecus of the difference between currency receivable and payable under currency exchange operations (Swaps) 308 455 362 93 395 325 Current account, ECSC operating budget 31 197 886 8 882 422 Other 26 333 649 5 644 781 Total 365 986 897 107 922 528 13. ACCRUALS AND DEFERRED INCOME (in ecus) 31 December 1992 1991 Interest on borrowings and credit lines 278 382 236 273 292 973 Commission on loans 741 369 786 920 Redemption premiums on loans 5 815 000 10 405 000 Total 284 938 605 284 484 893 14. PROVISIONS FOR LIABILITIES AND CHARGES (in ecus) 31 December 1992 1991 Provision for withholding tax to be paid (1) 4 834 353 4 367 533 Provision for purchases and sales of securities on the future markets (2) 48 629 1 681 943 Provision for equipping the Paris residence (3) 722 684 835 211 Provision for special costs connected with banking activities (4) 200 000 200 000 Total 5 805 666 7 084 687 15. COMMITMENTS FOR THE ECSC OPERATING BUDGET In 1992, commitments for the ECSC operating budget were as follows: (in ecus) Commitments at 31 December 1991 New legal commitments Payments Cancellations Commitments at 31 December 1992 Redeployment 540 310 836 154 795 282 200 227 767 44 526 949 450 351 402 Research 232 769 324 120 230 550 107 721 203 7 887 564 237 391 107 Interest subsidies Article 54 26 903 649 - 3 505 987 1 831 848 21 565 814 Interest subsidies Article 56 302 558 405 106 000 000 43 794 967 12 932 789 351 830 649 Social measures, steel industry 115 713 545 46 191 600 28 938 750 8 429 541 124 536 854 Social measures, coal industry (Rechar) 70 678 485 50 000 000 23 041 670 159 441 97 477 374 Total 1 288 934 244 477 217 432 407 230 344 75 768 132 1 283 153 200 16. PROVISION FOR FINANCING THE ECSC OPERATING BUDGET (in ecus) Provisions at 31 December 1991 Changes at 31 December 1992 Withdrawal Allocation Provisions at 31 December 1992 Net balance for the financial year (5): 1991 Contingency reserve (6) Extraordinary income for financing the 1993 operating budget (7) 253 500 000 70 000 000 - 253 500 000 - - 131 636 968 51 000 000 201 636 968 51 000 000 Surplus from the implementation of the operating budget 1991 1992 59 804 101 59 804 101 - 53 096 427 - 53 096 427 Total allocations withdrawn from the provision to finance the OB - 313 304 101 235 733 395 - Provision for fines and surcharges to be paid subsequently (8) 1 754 069 138 907 - 1 615 162 Total 385 058 170 313 443 008 235 733 395 307 348 557 17. RESERVES The pattern of reserves was as follows: (in ecus) Reserves at 31 December 1991 prior to allocation Allocations at 31 December 1991 Withdrawal 1992 Reserves at 31 December 1992 prior to allocations Allocations at 31 December 1992 Reserves at 31 December 1992 after allocations Guarantee fund 482 885 000 - (53 000 000) 429 885 000 - 429 885 000 Special reserve 188 980 000 - 188 980 000 - 188 980 000 Former pension fund 56 150 435 1 319 542 57 469 977 1 453 352 58 923 329 Total 728 015 435 1 319 542 (53 000 000) 676 334 977 1 453 352 677 788 329 The Guarantee Fund is intended to cover lending and borrowing operations. In order to cover partially the constitution of specific value adjustments in respect of loans and advances which is connected with the deterioration in the financial situation of several major steel companies as a result of the serious crisis which the steel sector has been facing for some time, ECU 53 million has been withdrawn from the Guarantee Fund. Despite this reduction, the ECSC's solvency ratio remains within the 14 and 16 % range recommended by a team of international experts to ensure that the structure of the balance sheet remained in equilibrium, having regard to the special status of the ECSC. The special reserve is used to grant loans from ECSC own funds to finance subsidized housing. The former pension fund originally represented the ECSC's total pension obligations prior to 5 March 1968. Since that the date, the Member States have assumed responsibility for the payment of staff pensions. This fund is used to finance housing loans for officials of the European Communities and has also been used to grant special loans to the coal and steel industries. 18. ANALYSIS OF THE RESULT FOR THE FINANCIAL YEAR Overall ECSC performance is influenced by both the result of non-budgetary operations (lending/borrowing - investment - exchange-rate variations) and the out-turn of the ECSC operating budget. 18.1. Non-budgetary operations (in ecus) Result 31 December 1992 1991 GROSS OPERATING MARGIN BEFORE CHANGES IN PROVISIONS: - lending/borrowing operations 3 670 975 6 524 561 - interest on bank accounts 87 304 194 89 620 755 - transactions concerning portfolio securities 130 088 182 150 829 272 - miscellaneous 5 672 055 603 357 Total 226 735 406 247 577 945 CHANGES IN PROVISIONS: - provisions for liabilities and charges 1 434 783 (1 946 642) - reserve for exchange differences (9) (5 520 666) (633 848) - value adjustments in respect of loans and advances (91 139 215) 9 676 420 RESULT ON NON-BUDGETARY OPERATIONS 131 510 308 254 673 875 18.2. Implementation of the ECSC operating budget (in ecus) 31 December 1992 1991 IMPLEMENTATION OF THE BUDGET Expenditure: - administrative expenditure - legal commitments - miscellaneous 5 000 000 477 217 432 243 505 5 000 000 454 375 588 73 086 Total 482 460 937 459 448 674 Revenue: - levy (note 24) - fines (note 24) - deposits (note 24) - cancellations of legal commitments (note 24) - miscellaneous - surplus from the last budget (note 16) - net balance from the last financial year (note 16) 146 473 186 - 8 75 768 132 11 937 59 804 101 253 500 000 175 054 804 - 18 348 32 311 852 16 202 91 351 569 220 500 000 Total 535 557 364 519 252 775 BUDGET OUT-TURN 53 096 427 59 804 101 (in ecus) 31 December 1992 1991 Result on non-budgetary operations 131 510 308 254 673 875 Budget out-turn 53 096 427 59 804 101 Withdrawal from the Guarantee Fund 53 000 000 Total 237 606 735 314 477 976 Allocation to the provisions for financing the operating budget for the following financial year: - surplus from the implementation of the budget - contingency reserve - net balance - extraordinary revenue (1993 budget) 53 096 427 131 636 968 - 51 000 000 59 804 101 - 253 500 000 - SURPLUS BEFORE ALLOCATION 1 873 340 1 173 875 19. ADMINISTRATIVE EXPENSES (FIXED AMOUNT) The ECSC paid a lump sum of ECU 5 million to the general budget of the Commission of the European Communities to cover its administration costs. 20. OTHER OPERATING CHARGES (in ecus) 31 December 1992 1991 Borrowing costs 420 531 601 827 Swift/Reuters charges 140 812 137 716 Other 10 944 12 162 Total 572 287 751 705 21. VALUE ADJUSTMENTS IN RESPECT OF LOANS AND ADVANCES The increased allocation to 'Value adjustments in respect of loans and advances' is connected with the deterioration in the financial situation of several major steel companies as a result of the serious crisis which the steel sector has been facing for some time. 22. INTEREST RECEIVED (in ecus) 31 December 1992 1991 Interest on loans 949 599 939 866 686 298 Payment and redemption premiums 8 824 756 12 670 676 Bank interest 88 810 339 89 799 136 Interest on fixed-income securities 124 484 602 125 091 970 Total 1 171 719 636 1 094 248 080 23. OTHER OPERATING INCOME (in ecus) 31 December 1992 1991 Lapsed coupons and bonds 11 089 27 779 Income from buildings 1 071 714 683 299 Miscellaneous 114 433 9 771 Total 1 197 236 720 849 24. INCOME RELATING TO THE OPERATING BUDGET (in ecus) 31 December 1992 1991 Levy (10) 146 473 186 175 054 804 Fines (11) - - Deposits 8 18 348 Cancellation of legal commitments 75 768 132 32 311 852 Miscellaneous 10 610 16 202 Total 222 251 936 207 401 206 25. OFF-BALANCE-SHEET COMMITMENTS 25.1. Commitments received (in ecus) 31 December 1992 1991 (a) Commitments arising from swaps - Notional capital commitments relating to interest-rate swaps - Capital commitments relating to interest-rate and currency swaps 840 423 237 3 852 663 317 498 370 172 3 232 090 075 (b) Commitments on securities - Securities bought forward - Securities sold forward 25 308 647 - 62 781 715 - Total 4 718 395 201 3 793 241 962 25.2. Commitments given (in ecus) 31 December 1992 1991 (a) Loans granted - Global loan contracts, lines still to be used 1 829 227 870 1 778 170 000 - Loans from borrowed funds signed but not yet paid 851 968 081 365 528 748 - Loans from own funds 18 238 892 26 412 033 (b) Commitments arising from swaps - Notional capital commitments relating to interest-rate swaps 840 423 237 498 370 172 - Capital commitments relating to interest-rate and currency swaps 4 122 694 510 3 325 904 400 (c) Commitments on securities - Securities bought forward - Securities sold forward 25 308 647 - 62 781 715 - (d) Receipts from lapsed coupons and bonds 11 089 27 779 Total 7 687 872 326 6 057 194 847 CHANGES IN THE FINANCIAL SITUATION FOR THE YEARS ENDING 31 DECEMBER 1992 AND 31 DECEMBER 1991 (ECU million) 1992 1991 Origin of funds Balance of profit-and-loss account 1,9 1,1 Items not involving a movement of funds: - amortization of issuing costs and redemption premiums 2,7 3,0 - value adjustments in respect of securities (0,3) (20,1) - value adjustments in respect of tangible assets 0,8 0,9 - value adjustments in respect of loans and advances (net) 91,2 (9,7) - increase (decrease) in 'Provision for legal commitments' (5,7) 112,7 - increase (decrease) in 'Provision for financing of ECSC operating budget' (78,1) 1,2 - increase (decrease) in accruals and deferred income (liabilities) 4,9 31,1 - decrease (increase) in accruals and deferred income (assets) and issuing costs and redemption premiums (16,9) (48,4) - increase (decrease) in 'Other liabilities' 258,1 (37,9) - decrease (increase) in 'Other assets' 2,1 (16,0) - allocation to the provision for risks and charges (1,3) 1,7 - increase (decrease) in the provision for changes in the ecu rate 5,5 0,7 - contribution not yet received from new Member States - - - exchange adjustments in respect of borrowings and loans (190,3) 6,4 - withdrawal from Guarantee Fund (53,0) - TOTAL FUNDS 21,6 26,7 Other resources: - proceeds of borrowings 1 474,4 1 445,7 - loan repayments 1 295,2 889,8 - contribution from new Member States (paid up) - - TOTAL RESOURCES 2 791,2 2 362,2 Use of funds: - loan disbursements 1 405,0 1 471,2 - redemption of borrowings 1 259,9 1 003,7 - increase (decrease) in bank balances and portfolio 125,0 (113,6) - acquisition and construction of buildings 1,3 0,9 TOTAL USES 2 791,2 2 362,2 IMPLEMENTATION OF THE ECSC OPERATING BUDGET FOR 1992 (ECU million) Requirements Forecast (12) Out-turn Operations to be financed from current resources (not reimbursable) 1. Administrative expenditure 5 5 2. Aid for redeployment (Article 56) 170 154,8 3. Aid for research (Article 55) 123 120,2 3.1. Steel (13) 3.2. Coal (13) 3.3. Social (13) 58 50 15 58 47,7 14,5 4. Interest subsidies 131 106 4.1. Investment (Article 54) 25 0 4.2. Conversion (14) (Article 56) 106 106 5. Social measures in connection with the restruction of the steel industry 53 46,2 6. Social measures in connection with the restructuring of the coal industry (14) 50 50 Surplus 4 53,1 TOTAL 536 535,3 TOTAL 536 535,3 Operations financed by loans from non-borrowed funds Origin of non-borrowed funds Subsidized housing 18 18 Special reserve and former ECSC pension fund 18 18 Resources Forecast (1) Out-turn Resources for the financial year 1. Current resources 1.1. Yield from levy at 0,27 % 150,2 146,2 1.2. Net balance from the preceding financial year 253,5 253,5 1.3. Fines and surcharges for late payment (4) 2,15 0 1.4. Miscellaneous t. e. t. e. (5) 2. Cancellation of commitments unlikely to be implemented 70,35 75,8 3. Unused resources carried over from 1991 59,8 59,8 4. Extraordinary receipts Social measures in connection with the restructuring of the steel industry t. e. t. e. 5. Utilization of the contingency reserve t. e. t. e. (1) This provision was created to allow the ECSC to meet its obligations in respect of a securities transaction on which there is a difference of interpretation regarding the applicability of withholding tax. (2) This provision was created to cover the risk of price movements on the futures contracts existing at the end of the financial year for the purchase and sale of securities. (3) This provision was created from the profit on the sale of the Paris building at the end of 1990 with a view to purchasing car-parking spaces in 1991 and equipping the residence in Avenue H. Martin. Work on the residence will be completed in 1993, and the balance of this provision can then be divided between the ECSC, Euratom and the Community in proportion to their initial contribution to the purchase of the Paris building. (4) This provision was created to cover any assistance costs and other unforeseen expenditure. The risk in question is primarily in the legal field because the ECSC has less recourse, for its operations, to national agents who bear all expenditure relating to loan operations.(5) Until 31 December 1991 the net balance of the ECSC's financial activity allocated to provisions at the end of the year was added to the resources of the ECSC operating budget for the next financial year. From 31 December 1992 onwards a different accounting method has been applied (note 2). (6) This reserve is intended to cover the following amounts: - ECU 70 million for the requirements of the 1993 operating budget that have been decided, - ECU 85,6 million for the maximum amount of compensation which the ECSC is likely to have to pay to companies in respect of losses likewise suffered by them in connection with the application of the quota system which was in force between October 1980 and June 1988; - ECU 46 million for any difference between expenditure committed and income generated by ECSC activities during the financial year as a result of the change in method described in note 2. (7) The ECSC has constituted a provision of ECU 51 million for financing additional social measures for the iron and steel industry under the 1993 ECSC operating budget. (8) Fines are considered as ECSC resources only when they have actually been paid. Fines imposed but not yet paid are therefore allocated to provisions. (9) During 1992, changes in exchange rates led to a conversion profit of ECU 5 520 666, which was offset by the transfer of the same amount to the value adjustment reserve. The corresponding figure for 1991 was ECU 633 848.(10) The ECSC is authorized under the Treaty to impose a levy on coal and steel produced by undertakings in the Community. The levy is calculated on the basis of the average values in the Community of the various products concerned. The levy rate had been 0,31 % since 1 January 1980. The rate applicable during 1992 was 0,27 %. On 23 December 1992 the Commission decided to set the levy rate for the 1993 financial year at 0,25 %. At 31 December 1992 levy income included ECU 110 911 in respect of surcharges for late payment (ECU 276 819 at 31 December 1991). (11) This item comprises the revenue from fines imposed by the Commission in accordance with Articles 58 and 60 of the ECSC Treaty, together with surcharges for late payment.(12) See the Commission's implementation foreast of 17 November 1992 (OJ No C 307, 25. 11. 1992). (13) Aid for projects with a specific impact on the environment: forecast: lines 3.1.: 8 out-turn: lines 3.1.: 6,9 3.2.: 16 3.2.: 16,7 3.3.: 3 3.3.: 3,7 4.1.: 1,9 4.1.: - (14) Amounts chargeable to the Rechar programme: forecast: lines 4.2.: 50 out-turn: lines 4.2.: 44,8 6.: 50 6.: 50 (4) The amount still due to the ECSC at 31 December 1991 was ECU 1 622 199. (5) The amount actually collected was ECU 10 618.