FINANCIAL STATEMENTS OF THE EUROPEAN COAL AND STEEL COMMUNITY AT 31 DECEMBER 1990 AND 31 DECEMBER 1989 (91/C 223/03)

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 1990 and 31 December 1989,

-Profit-and-loss accounts for the years ending 31 December 1990 and 31 December 1989,

-Allocation of profit for the years ending 31 December 1990 and 31 December 1989.

These financial statements are accompanied by the report of the Court of Auditors provided for pursuant to Article 78 (f) (5) of the ECSC Treaty, dealing with the financial operations of the ECSC for 1990 with the exception of those relating to revenue and expenditure of an administrative nature.

Balance sheets at 31 December 1990 and 31 December 1989

(amounts expressed in ecus)

- Before allocation of profit - ASSETS

31 December 1990

31 December 1989

Balances with central banks (note 3)

2 455 381 85 900 Loans and advances to credit institutions (note 4):

- repayable on demand

-with agreed maturity dates or periods of notice

-loans

36 330 473 968 451 679 2 694 352 165 25 083 527 880 755 585 2 353 347 922 Total 3 699 134 317 3 259 187 034 Loans and advances to customers

(note 5):

- loans

- levy

- fines

4 212 720 400 1 818 180 1 702 087 4 567 903 983 5 630 108 18 745 917 Total 4 216 240 667 4 592 280 008 Debt securities including fixed-income securities (note 6):

- issued by public bodies

-issued by other borowers

(including own-debt securities: 104 283 876 in 1990 and

97 100 176 in 1989)

1 007 034 384 237 273 716

796 981 581 302 137 505 Total 1 244 308 100 1 099 119 086 Tangible and intangible assets (note 7)

5 991 681 6 452 622 Other assets (note 8)

6 660 664 52 291 315 Prepayments and accrued income

(note 9)

294 513 076 270 025 870 TOTAL ASSETS 9 469 303 886 9 279 441 835 Off-balance-sheets commitments

(note 24, p. 1)

2 475 819 034 1 173 114 513

- Before allocation of profit - LIABILITIES

31 December 1990

31 December 1989

LIABILITIES VIS-A-VIS THIRD PARTIES

Amounts owed to credit institutions

(note 10):

- repayable on demand

-with agreed maturity dates or periods of notice

-borrowings

1 946 183 90 177 871 3 210 329 694 0 64 750 534 3 639 907 617 Total 3 302 453 748 3 704 658 151 Debts evidenced by certificates

(note 11)

3 462 281 500 3 023 747 481 Other liabilities (note 12)

145 747 865 85 289 620 Accruals and deferred income

(note 13)

257 939 731 275 459 841 Provisions for liabilities and charges (note 14)

5 437 682 4 741 757 Commitments for the ECSC Operating Budget (note 15)

1 176 182 496 1 120 320 224 TOTAL LIABILITIES VIS-A-VIS THIRD PARTIES

8 350 043 022 8 214 217 074 NET ASSETS

Provisions for financing the ECSC Operating Budget (note 16)

383 939 347 325 187 850 RESERVES (note 17):

- Guarantee fund

-Special reserve

-Former pension fund

482 885 000 188 980 000 54 887 556 482 885 000 188 980 000 53 698 379 Total 726 752 556 725 563 379 Revaluation reserve

7 139 997 12 799 169 Profit brought forward

485 186 893 213 Profit for the financial year

943 778 781 150 NET TOTAL 1 119 260 864 1 065 224 761 TOTAL LIABILITIES 9 469 303 886 9 279 441 835 Off-balance-sheet commitments

(note 24, p. 2)

4 773 918 416 3 291 770 209

Profit-and-loss accounts for the years ending 31 December 1990 and 31 December 1989

(amounts expressed in ecus) EXPENDITURE

31 December 1990

31 December 1989

Interest payable and similar charges:

- interest

-issuing costs and redemption premiums

706 897 548

14 853 731 660 357 516

12 194 039 Total 721 751 279 672 551 555 Commissions payable

2 817 495 2 871 075 Net losses on financial operations:

- Foreign-exchange losses

-Losses on securities

-Value adjustments in respect of securities

81 272 4 236 067 0 0 0 21 657 319 Total 4 317 339 21 657 319 Administrative expenses (note 19)

5 000 000 5 000 000 Value adjustments in respect of tangible assets (note 7)

9 007 495 345 996 Other operating charges (note 20)

601 021 574 360 Value adjustments in respect of losses and advances and provisions for contingent liabilities and for commitments:

- Value adjustment in respect of loans and advances

-Allocation to the provision for risks and charges

2 742 950 730 885 1 223 795 Total 18 082 351 7 144 151 TOTAL OPERATING CHARGES 746 968 464 704 224 100 Extraordinary charges

32 272 683 369 Conversion difference

5 659 172 481 029 Legal commitments for the financial year (note 15)

445 277 280 407 310 119 Allocation to reserves for financing the ECSC Operating Budget

311 851 569 286 887 850 TOTAL CHARGES 1 509 788 757 1 399 586 467 Profit for the financial year

943 778 781 150 TOTAL 1 510 732 535 1 400 367 617

REVENUE

31 December 1990

31 December 1989

Interest receivable and similar income (note 21):

- interest

(including interest on fixed-income securities: 106 346 129 in 1990 and 87 772 094 in 1989)

-issuing and redemption premiums

927 491 072 10 944 940 847 242 396 8 027 159 Total 938 436 012 855 269 555 Net profit on financial operations:

- foreign-exchange profits

-profits on securities

-value adjustments in respect of securities

0 0 2 770 868

0 927 327 Total 2 770 868 927 327 Value adjustments in respect of loans and advances and provisions:

- value adjustments in respect of loans and advances

-transfer from the provision for risks and charges

10 772 378 0 96 664 866 Total 10 772 378 96 664 866 Other operating income

(note 22)

1 785 786 1 055 435 Extraordinary income

(note 7)

9 640 148 0 TOTAL OPERATING INCOME 963 405 192 953 917 183 Conversion difference

0 460 741 Transfer from the value adjustment reserve

5 659 172 481 029 Income linked to the Operating Budget (note 23)

291 280 321 242 127 214 Transfer from the provision for financing the ECSC Operating Budget

250 387 850 203 381 450 TOTAL INCOME 1 510 732 535 1 400 367 617

Allocation of profit for the years ending 31 December 1990 and 31 December 1989

(amounts expressed in ecus)

1990

1989

Profit not allocated at 1 January

485 186 893 213 Profit for the year to be allocated

943 778 781 150 1 428 964 1 674 363 Allocation to the former pension fund

1 262 879 1 189 177 Profit not allocated at 31 December

166 085 485 186

NOTES TO THE FINANCIAL STATEMENTS AT 31 DECEMBER 1989 AND 31 DECEMBER 1990

(amounts expressed 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.A change in the accounting methods has been made in the financial statements at 31 December 1990 (see explanation in note 2).

1.3.The ECSC's financial statements for 1990 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).

1.4. 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

1990

1989

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

42,1839

2,04195

2,30384

0,707840

7,88260

6,95010

1 540,26

0,767840

130,604

182,818

214,065

1,36330

1,741620

1,581430

184,932

42,592

2,02412

2,28602

0,742783

7,88161

6,92042

1 517,55

0,769128

131,059

179,03

188,287

1,19699

1,84277

1,38684

171,888

1.5.At 31 December 1990 the various currencies listed in 1.4, together with the ecu, made up the ECSC's balance sheet as follows:

(in ECU 1 000)

Currency

Assets

Liabilities

Belgian franc

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

ECU

197 992184 2963 858 692316 111624 2672 306899 997785 1881 342186 41829 1953 3041 174 473314 73852 484274 641563 860 127 508169 2873 642 249267 005555 989-768 043720 511 -152 31227 6616851 122 736303 76354 263272 9931 284 299 Total 9 469 304 9 469 304

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 currency swaps.

The offsetting of these items on the assets and liabilities sides is designed to prevent artificial inflation of the balance sheet.

This accounting operation is carried out in ecus and covered an amount of ECU 1 946 000 000 in 1990.

The real weight of the ecu in the ECSC's accounts can therefore be assessed more correctly if this amount is added both to the assets and to the liabilities sides, as well as to the balance sheet total.

2.ACCOUNTING POLICIES AND METHODS

The financial statements are drawn up in accordance with generally recognized accounting principles. During the financial year the ECSC changed its accounting method as described in 2.2.

2.1.General accounting methods

2.1.1.Non-specific value adjustment on loans

In addition to the value adjustments in respect of potential risks of non-recovery, a non-specific value adjustment has been made to cover the general risk of non-recovery of loans amounting to 0,8 % of the total loans not covered by Member States' or bank guarantees;

2.1.2.Conversion to ecus of charges and income accounts

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 of accounting method

2.2.1.Fines

The method of entering fines in the accounts was changed from 1 January 1990.

From the date, only fines actually collected were considered as ECSC income. Fines imposed have been entered under loans and advances to customers, the counter-entry being the provision for fines to be collected. This approach makes it possible to bring the method of accounting for fines in the balance sheet into line with that used in the Operating Budget, where a fine is only recognized as a receipt when it has actually been paid. This change has no effect on the ECSC result.

2.2.2.Sale and repurchase transactions

From the 1990 financial year, the ECSC's annual accounts will be presented in accordance with Council Directive 86/635/EEC.

These new accounting regulations require a change in the method for dealing with sale and repurchase transactions.

The ECSC has hitherto limited its sale and repurchase transactions to those covered by a firm repurchase agreement.

Under the old method, such transactions were in two quite distinct parts: sales and forward purchases. The securities sold did not therefore appear in the balance sheet and the repurchase agreement appeared in an off-balance-sheet item. A risk provision was created when the market price was below the price agreed for the future repurchase.

Henceforth, beginning in the 1990 financial year, sale and repurchase transactions will be entered in the accounts in accordance with Article 12, paragraph 4, of Council Directive 86/635/EEC. The securities transferred will continue to appear in the balance sheet and the sale price will be entered on the liabilities side of the balance sheet as an amount owed to the transferee.

This change in accounting method has resulted in a profit of ECU 479 000 for the 1990 financial year.

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 comprises loans and advances to CEDEL repayable on demand.

4.2.With agreed maturity dates or periods of notice

The breakdown of the time to completion of these transactions is as follows:

31 December

1990

1989

up to three months

661 447 294 528 515 564

three months to one year

307 004 385 339 975 875

over one year

- 12 264 146

Total 968 451 679 880 755 585

4.3.Loans

The breakdown of the time to completion of these transactions is as follows:

31 December

1990

1989

up to three months

7 569 415

15 235 035

three months to one year

261 163 095

271 576 441

over one year

1 663 077 026

1 352 781 701

over five years

762 542 629

713 754 745

Total 2 694 352 165

2 353 347 922

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:

31 December

1990

1989

1. Loans paid from borrowed funds

Amounts outstanding, excluding redemption premiums

4 117 953 733

4 476 574 330

Redemption premiums

45 000 000

45 000 000

Value adjustments

(13 167 776)

(15 018 627)

Sub-total 4 149 785 957

4 506 555 703

2.Loans from the special reserve and other own funds for financing subsidized housing 28 863 631

28 433 484

Total I 4 178 649 588

4 534 989 187

The breakdown of the time to completion of these transactions is as follows at 31 December:

1990

1989

up to three months

77 230 278

100 944 378

three months to one year

503 933 279

559 344 689

one year to five years

2 603 351 537

2 758 393 068

over five years

1 007 302 270

1 131 325 679

3.Loans paid from the former pension fund to officials of the European Communities for housing construction

32 529 377

30 773 117

4.Loan repayments overdue and interest on arrears

1 541 435

2 141 679

Grand total 4 212 720 400

4 567 903 983

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 6 669 660 (ECU 10 489 538 at 31 December 1989). It comprises mainly ECU 3 954 650 subject to legal proceedings (ECU 2 671 100 at 31 December 1989) and ECU 1 498 891 relating to temporary deferment in respect of coal in stock (ECU 1 353 663 at 31 December 1989).

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 1 702 087 (ECU 18 745 917 at 31 December 1989).

6. DEBT SECURITIES INCLUDING FIXED-INCOME SECURITIES

6.1.Valuation

Debt securities including fixed-income securities are valued at average purchase price or market value at 31 December 1990, whichever is the lower.

This principle is not applied in the case of securities considered as financial fixed assets (see 6.6).

6.2.Composition

Debt securities including fixed-income securities are divided as follows:

Value adjustments on securities (withdrawal)

31 December

1990

1989

ISSUED BY PUBLIC BODIES

- gross value

- value adjustment

(1 766 873) 1 032 162 619 (25 128 235) 823 876 689 (26 895 108) - net value

1 007 034 384 796 981 581 OWN-DEBT SECURITIES

- gross-value

- value adjustment

(128 485) 107 293 671 (3 009 795) 100 238 456 (3 138 280) - net value

104 283 876 97 100 176 ISSUED BY OTHER BORROWERS

- gross value

- value adjustment

(875 510) 134 182 311 (1 192 471) 207 105 310 (2 067 981) - net value

132 989 840 205 037 329 TOTAL

- gross value

- value adjustment

(2 770 868) 1 273 638 601 (29 330 501) 1 131 220 455 (32 101 369) - net value

1 244 308 100 1 099 119 086

6.3.Maturities in 1991

The following securities in the portfolio reach final maturity during 1991 (in ecus):

- issued by public bodies:278 176 057 - own-debt securities:10 538 466 - issued by other borrowers:

66 222 908 Total 354 937 431

6.4.Quoted/unquoted securities

The securities portfolio comprises ECU 1 050 397 521 of securities quoted on a stock exchange, the balance of ECU 193 910 579 being unquoted securities.

6.5.Sale and repurchase transactions

The sub-item 'issued by public bodies' in 6.2 (ECU 1 007 034 384) contains ECU 85 791 566 in respect of sale and repurchase transactions.

6.6.Financial fixed assets

6.6.1.Financial fixed assets are defined as securities that will remain in the portfolio until their final maturity.

They comprise mainly short-term paper and own-debt securities repurchased for servicing ECSC borrowings.

6.6.2.Financial fixed assets are valued at average purchase price or redemption value, whichever is the lower.

The redemption value of the securities exceeds the average purchase price by a total of ECU 5 032 297.

6.6.3.Financial fixed assets are made up as follows (in ecus):

- Issued by public bodies:51 535 805 - Own-debt securities:13 875 548 - Issued by other borrowers:

65 225 408 Total 130 636 761

7.TANGIBLE AND INTANGIBLE ASSETS

Year of acquisition

Acquisition price

31 December

1990

1989

Tangible assets

- Paris buildings

- Washington building

- Lisbon building

- New York building

- Canberra building

1990

1971

1986

1987

1987

8 480 684 882 654 1 265 526 2 132 944 2 350 603 1 588 360 927 960 1 645 650 2 169 787 1 647 196 1 012 320 1 789 794 2 284 733 5 331 758 5 734 044 Intangible assets

- Lease on Milan building

1986

879 883 659 923 718 578 Total tangible and intangible assets 5 991 681 6 452 622

The building at 61-63 rue des Belles Feuilles in Paris owned by the ECSC was sold for ECU 9,6 million on 20 December 1990. The proceeds of the sale were used to purchase two buildings: the first, in avenue Eylau, will house the offices of the Commission's delegation to the OECD from June 1991; the second, in avenue H. Martin, will serve as the residence of the head of the delegation once the necessary work has been carried out.

The purchase was undertaken for non-speculative reasons, primarily to provide the delegation with more modern offices.

For accounts purposes, ECU 8 480 683 of the proceeds from the sale of the building, which was fully amortized, was used to purchase the new buildings. The surplus from the operation was used to create a provision for liabilities and charges in the sum of ECU 1 159 465 with a view to the subsequent purchase of parking facilities to replace those previously available in the rue des Belles Feuilles.

The value of the Washington building was estimated at ECU 2,8 million at 31 December 1985.

In 1986 the ECSC purchased a 45 year lease on a building in Milan. At the end of this period, the building will revert to its owner.

These buildings are used by the Commission of the European Communities.

8. OTHER ASSETS

31 December

1990

1989

Loans, payments due and not received

4 161 222 4 310 229 - Current account, ECSC Operating Budget

- 44 171 660 - Portfolio taxes and VAT to be re-claimed

1 540 499 155 223 - Loans to officials - miscellaneous

2 339 605 236 524 - Miscellaneous

2 475 861 7 538 251 10 517 187 56 411 887 Cumulative value adjustments

(3 856 523) (4 120 572) Total 6 660 664 52 291 315

9.REPAYMENTS AND ACCRUED INCOME

31 December

1990

1989

Interest on loans

165 685 027 153 283 432 Interest on deposits and securities portfolio

70 579 666 58 504 132 Levy declared for November and December but payable after 31 December

32 415 112 25 840 271 Surcharges on fines

- 76 629 Issuing costs and redemption premiums

25 532 481 32 058 930 Other

300 790 300 790 Total prior to value adjustments

294 513 076 270 064 184 Value adjustments

(-) (38 314) Total after value adjustments

294 513 076 270 025 870

10.AMOUNTS OWED TO CREDIT INSTITUTIONS

The time to maturity on these operations is as follows:

31 December

1990

1989

repayable on demand

1 946 183 - up to three months

99 715 772 210 411 743 three months to one year

550 114 510 561 633 413 one year to five years

1 775 574 039 2 304 106 308 over five years

875 103 244 628 506 687 Total 3 302 453 748 3 704 658 151

11.DEBTS EVIDENCED BY CERTIFICATES

Part of the loans outstanding at 31 December 1990 will reach maturity during the 1991 financial year. Such loans amount to ECU 308 962 623.

12.OTHER LIABILITIES

31 December

1990

1989

Exchange value in ecus of the difference between currency receivable and payable under currency exchange operations (swaps)

109 209 665 79 542 501 Current account, ECSC Operating Budget

32 738 588 - Other

3 799 612 5 747 119 Total 145 747 865 85 289 620

13.ACCRUALS AND DEFERRED INCOME

31 December

1990

1989

Interest on loans and credit lines

242 088 297 253 686 028 Commission on loans

856 434 1 006 897 Redemption premiums on loans

14 995 000 19 585 000 Other

- 1 181 916 Total 257 939 731 275 459 841

14.PROVISIONS FOR LIABILITIES AND CHARGES

31 December

1990

1989

Provision for withholding tax to be paid (1)

4 078 217 3 778 553 Provision for purchases and sales of securities on the futures market (2)

- 963 204 Provision for the purchase of car-parking facilities in Paris (3)

1 159 465

- Provision for assistance costs (4)

200 000 - Total 5 437 682 4 741 757

15. COMMITMENTS FOR THE ECSC OPERATING BUDGET

In 1990, commitments for the ECSC Operating Budget were as follows:

Commitments at

31. 12. 1989

New

legal

commitments

Payments

Cancellations (2)

Commitments at

31. 12. 1990

Redeployment (1)

593 097 4819 196 618 169 103 57514 896 425 154 662 276 80 650 354 526 888 42624 093 043 602 294 099 184 000 000 154 662 276 80 650 354 550 981 469 Research

160 287 287 93 874 290 61 309 853 7 596 031 185 255 693 Interest subsidies

Article 54

29 348 938 13 035 920 5 631 222 3 674 589 33 079 047 Interest subsidies

Article 56

231 227 813 69 151 000 40 256 632 13 874 842 246 247 339 Social measures steel industry

95 695 937 45 216 070 20 452 500 120 459 507 Social measures in connection with rationalization of the coal industry

1 466 150 40 000 000 1 306 709 40 159 441 Total 1 120 320 224 445 277 280 283 619 192 105 795 816 1 176 182 496

16. PROVISIONS FOR FINANCING THE ECSC OPERATING BUDGET

Provisions at

31. 12. 1989

Changes at 31. 12. 1990

Withdrawal

Allocation

Provisions at

31. 12. 1990

Net balance for the financial year (1)

1989

1990

Contingency reserve (2)

206 000 000 - 70 000 000 206 000 000 - - 220 500 000 - - 220 500 000 70 000 000 Surplus from the implementation of the Operating Budget:

1989

1990

44 387 850 - 44 387 850 - - 91 351 569 - 91 351 569 Total allocations withdrawn from provisions to finance the OB

250 387 850 311 851 569 Provision for fines to be paid subsequently (3)

4 800 000 2 712 222 2 087 778 Total 325 187 850 383 939 347

17. RESERVES

Reserves were as follows:

Reserves at

31. 12. 1989

prior to allocation

Allocations at

31. 12. 1989

Reserves at

31. 12. 1990

prior to allocation

Allocations at

31. 12. 1990

Reserves at

31. 12. 1990

after allocation

Guarantee fund

482 885 000 482 885 000 482 885 000 Special reserve

188 980 000 188 980 000 188 980 000 Former pension fund

53 698 379 1 189 177 54 887 556 1 262 879 56 150 435 Total 725 563 379 1 189 177 726 752 556 1 262 879 728 015 435

The guarantee fund is intended to cover lending and borrowing operations.

The special reserve is used to grant loans from ECSC own funds to finance subsidized housing.

The former pension fund originally represented the total pension obligations covered by the ECSC prior to 5 March 1968. Since that 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 PERFORMANCE FOR THE FINANCIAL YEAR ENDING 31 DECEMBER 1990

Overall ECSC performance is effected by both the result of non-budgetary transactions (loans/borrowing - investment - exchange-rate variations) and by budgetary transactions (ECSC Operating Budget).

18.1.Non-budgetary transactions

These transactions closed on 31 December 1990 with a net profit in excess of that at 31 December 1989.

(ECU million)

Result

31 December

1990

1989

Gross operating margin before changes in provisions

Loan/borrowing transactions

5,7

10,1

Interest on bank accounts

101,8

82,6

Transactions concerning portfolio securities

104,8

67,0

Miscellaneous

- 4,6

- 2,4

Total 207,7

157,3

Changes in provisions

Change in ecu rates

5,7 (1)

0,5 (1)

Value adjustments in respect of loans and advances

8,0

96,7

Net result on non-budgetary transactions

221,4

254,5

18.2.ECSC Operating Budget transactions

(ECU million)

31 December

1990

1989

Revenue:

- levy

- fines (1)

- deposits

- cancellations of legal

commitments

178,5

6,9

0,1

105,8

165,7

5,3

0,1

71,1

Total revenue 291,3

242,2

Expenditure:

- administrative expenditure

- legal commitments

- 5,0

- 445,3

- 5,0

- 407,3

Total expenditure - 450,3

- 412,3

Changes in the provisions for financing the ECSC Operating Budget (2)

- 61,5

- 83,5

Result on budgetary transactions

- 220,5

- 253,6

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 administrative costs.

20.OTHER OPERATING CHARGES

31 December

1990

1989

Borrowing costs

469 157 373 746 Swift/Reuters costs

118 839 112 320 Other

13 025 88 294 Total 601 021 574 360

21.INTEREST RECEIVED

31 December

1990

1989

Interest on loans

718 983 189 676 755 627 Payment and redemption premiums

10 944 939 8 027 159 Bank interest

102 161 755 82 714 675 Interest on fixed-income securities

106 346 129 87 772 094 Total 938 436 012 855 269 555

22.OTHER OPERATING INCOME

31 December

1990

1989

Receipts from coupons and bonds

51 613 277 144 Income from buildings

898 339 607 008 Miscellaneous

835 834 171 283 Total 1 785 786 1 055 435

23.INCOME LINKED TO THE OPERATING BUDGET

31 December

1990

1989

Levy (1)

178 494 591 165 667 139 Fines (2)

6 893 489 5 279 069 Deposits

92 813 64 744 Cancellation of legal commitments

105 795 816 71 116 262 Miscellaneous

3 612 - Total 291 280 321 242 127 214

24.OFF-BALANCE-SHEET COMMITMENTS

24.1.Commitments received

31 December

1990

1989

(a) Loans signed but not yet paid

- 79 074 695 (b)Commitments arising from swaps

- notional capital commitments from interestrate swaps

-capital commitments from interest-rate and currency swaps

295 757 588 2 172 710 653 238 034 814 1 413 432 588 (c)Commitments on securities

- securities bought forward

- securities sold forward

- 7 350 793 36 373 755 6 198 661 Total 2 475 819 034 1 773 114 513

24.2.Commitments given

31 December

1990

1989

(a)Loans granted

- global loan contracts, lines still to be used

2 164 867 090 1 435 050 376 -loans from borrowed funds signed but not yet paid

- 80 525 397 -loans from own funds

23 973 730 2 582 453 (b)Commitments arising from swaps

-notional capital commitments from interest-rate swaps

295 757 588 238 034 814 -capital commitments from interest-rate and currency swaps

2 281 920 317 1 492 975 089 (c)Commitments on securities

- securities bought forward

- securities sold forward

- 7 350 793 36 373 755 6 198 661 (d)Receipts from coupons and bonds

48 898 29 664 Total 4 773 918 416 3 291 770 209

CHANGES IN THE FINANCIAL SITUATION FOR THE YEARS ENDING 31 DECEMBER 1990 AND 31 DECEMBER 1989

(ECU million)

1990

1989

Origin of funds

Balance of profit-and-loss account

1,- 0,8 Items not involving a movement of funds

- Amortization of issuing costs and redemption premiums

3,5 3,5 -Value adjustments in respect of securities

(2,8) 21,7 -Value adjustments in respect of tangible assets

9,- 0,3 -Value adjustments in respect of loans and advances (net)

(8,-) (96,7) -Increase (decrease) in item 'Provision for legal commitments'

55,9 111,2 -Increase (decrease) in item 'Provision for the financing of the ECSC Operating Budget'

58,7 83,5 -Increase (decrease) in accruals and deferred income (liabilities)

(13,1) 93,0 -Decrease (increase) in accruals and deferred income (assets) and issuing costs and redemption premiums

(32,4) (39,2) -Increase (decrease) in item 'Other liabilities'

60,5 (5,0) -Decrease (increase) in items contained in 'Other assets'

73,3 2,0 -Allocation to the provision for risks and charges

0,7 1,2 -Increase (decrease) in the provision for changes in the ecu rate

(5,7) (0,5) -Contribution not yet received from new Member States

- (0,6) -Exchange adjustments in respect of borrowings and loans

(37,-) (122,6) TOTAL FUNDS 163,6 52,6 Other resources:

- Proceeds of borrowings

1 085,9 913,3 - Loan repayments

935,3 812,1 - Contribution by new Member States (paid up)

- 0,6 TOTAL 2 184,8 1 778,6 Use of funds

- Loan disbursements

995,2 702,4 - Remdemption of borrowings

1 029,5 994,0 - Increase (decrease) in bank balances and portofolio

151,6 80,7 - Acquisition and construction of buildings

8,5 1,5 TOTAL 2 184,8 1 778,6

IMPLEMENTATION OF THE ECSC OPERATING BUDGET FOR 1990

(ECU million)

Requirements

Forecast (1)

Outturn

Resources

Forecast (1)

Outturn

Operations to be financed from current resources (not reimbursable)

1. Administrative expenditure

5

5

2.Aid for redeployment

(Article 56)

184

184

3.Aid for research (Article 55)

88

93,9

3.1. Steel

41 43,3 3.2.Coal

34 36,3 3.3.Social

13 14,3 4.Interest subsidies

68

82,2

4.1.Investment (Article 54)

10 13 4.2.Conversion (Article 56)

58 69,2 5.Social measures in connection with the restructuring of the steel industry

50

45,2

6.Social measures in connection with the rationalization of the coal industry

40

40

Resources for the financial year

1.Current resources

1.1.Yield from levy at 0,31 %

172

178,5

1.2.Net surplus from the preceeding financial year

139

206

1.3.Fines and surcharges for late payment (2)

14

6,9

1.4.Miscellaneous

t.e.

0,1

2.Cancellation of commitments unlikely to be implemented 60

105,8

(3) 3.Unused resources carried over from 1989

t.e.

44,4

4.Extraordinary receipts

Social measures in connection with the restructuring of the steel industry 50

-

5.Utilization of the contingency reserve

t.e.

t.e.

Surplus

91,4

TOTAL 435

541,7

TOTAL 435

541,7

Operations financed by loans from non-borrowed funds

Subsidized housing

12

12

Origin of non-borrowed funds

Special reserve and former ECSC pension fund

12

12

(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 affecting the futures contracts for the purchase and sale of securities that existed at the end of the financial year.

(3)This provision was created from the profit on the sale of the Paris building with a view to the subsequent purchase of parking facilities (cf. note 7).

(4)This provision was created to cover any unexpected assistance costs and other expenditure that might arise. This risk is found primarily in the legal field because the ECSC now has less recourse, during its operations, to national agents who bear the cost of all expenditure relating to this type of operation.(1) This item contains the legal commitments which appeared under Social measures - coal industry at 31 December 1989.

(2)Checks in progress at 31 December 1990 show that other cancellations amounting to ECU 116 543 could be made in respect of the interest subsidies pursuant to Article 54, with cancellations of ECU 9 126 100 in respect of interest subsidies pursuant to

Article 56. A final decision regarding such cancellations can only be taken once all the facts have been collected and verified.(1) The net balance of the ECSC's financial activity allocated to provisions at the end of the year adds to the resources of the ECSC Operating Budget for the next financial year.

(2)This amount includes ECU 20 million in respect of the normal contingency reserve and is designed to cover any shortfall in resources compared with forecasts and any excess over the requirements provided for in the budget. The balance of ECU 50 million is inteded for financing priority measures in the next few years, and in particular to cover the expected increase in certain requirements (for example, connected with the environment).

(3)Fines are considered as ECSC resources only when they have actually been paid (cf. note 2.2 Change of accounting method). Fines imposed but not yet paid are therefore allocated to provisions.

Movements in these provisions are included in receipts of fines, which also include fines imposed and paid during the financial year.

(1) During the 1990 financial year, changes in exchange rates led to a conversion loss of ECU 5,7 million, which was offset by the transfer of the same amount from the revaluation reserve (the loss in 1989 amounted to ECU 0,5 million).(1) In accordance with the change in the accounting method described in 2.2, it is the fines actually received that appear in this item. At 31 December 1989, this item covered fines imposed during the financial year, including late-payment surcharges due, whereas fines received during the financial year appeared in the Operating Budget summary table.

(2) See note 16.(1)The ECSC is authorized under the Treaty to impose a levy on coal and steel produced by undertakings in the Community. The calculation is based on the Community average values of the various products concerned. The levy rate has been 0,31 % since 1 January 1980. On 18 December 1990 the Commission decided to set the levy rate for the 1991 financial year at 0,29 %. At 31 December 1990 the surcharges (ECU 410 328 at 31 December 1989).

(2)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. In 1990, a fine of ECU 94 000 was cancelled by the Commission and several fines were reduced by ECU 458 065. These amounts are included in the item 'Extraordinary charges'.(1) In the light of the Commission's implementation forecast of 20 December 1989 OJ No L 380, 29. 12. 1989.

(2)The amount of ECU 6,9 million represents the total received in 1990 but does not take into account the ECU 1,7 million due to the ECSC at 31 December 1990.

(3)Including the following amounts re-charged to the original lines:

technical steel research: ECU 2,3 million

technical coal research:ECU 2,3 million

social research:ECU 1,3 million

interest subsidies on investment loans (Article 54): ECU 3 million;

interest subsidies on conversion loans (Article 56):ECU 11,2 million.