FINANCIAL STATEMENTS OF THE EUROPEAN COAL AND STEEL COMMUNITY AT 31 DECEMBER 1994 (95/C 244/07)

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 45c of the Treaty establishing the ECSC, are published:

- the balance sheet of the European Coal and Steel Community at 31 December 1994,

- the profit-and-loss accounts for the year ending 31 December 1994,

- the allocation of the surplus for the year ending 31 December 1994,

- the notes relating to the financial statements at 31 December 1994.

These financial statements are accompanied by the report of the Court of Auditors provided for under Article 45c of the ECSC Treaty, dealing with the financial operations of the ECSC for 1994 with the exception of those relating to revenue and expenditure of an administrative nature.

Balance sheets at 31 December 1994

(amounts in ecus)

- Before allocation of surplus -

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- Before allocation of surplus -

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Profit-and-loss accounts for the year ending 31 December 1994

(amounts in ecus)

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Allocation of the surplus for the year ending 31 December 1994

(amounts in ecus)

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NOTES RELATING TO THE FINANCIAL STATEMENTS AT 31 DECEMBER 1994

(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 acitivity, borrowings raised on the financial markets and direct bank loans.

1.2. The ECSC's financial statements at 31 December 1994 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 of 14 August 1978 and OJ No L 372 of 31 December 1986).

1.3. ECSC accounts are kept in the various currencies used for its financial acitivity. The financial statements are expressed in ecus.

The following rates have been used for converting year-end balance-sheet amounts expressed in national currency into ecus:

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1.4. At 31 December 1994 the various currencies listed in 1.3, together with the ecu, made up the ECSC's balance sheet as follows

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2. ACCOUNTING POLICIES AND METHODS

2.1. The financial statements are drawn up in accordance with generally recognized accounting principles.

2.2. Charges and income for the financial year are entered in national currency and converted to ecus at the monthly accounting rate in force on the day of the transaction.

3. BALANCES WITH CENTRAL BANKS

This item represents the ECSC's balances with the central bank of certain 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:

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4.3. Loans

The breakdown of these loans by time to maturity is as follows:

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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:

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5.2. Levy

Before value adjustment, this item amounts to ECU 16 625 804 (ECU 20 472 601 at 31 December 1993). It comprises in particular ECU 5 924 068 subject to legal proceedings (ECU 5 468 070 at 31 December 1993) and ECU 432 179 relating to temporary deferment in respect of coal in stock (ECU 2 884 382 at 31 December 1993).

Payment of the levy in respect of coal in stock is temporarily deferred under a general decision taken in 1972.

5.3. Fines

This item contains the Commission's claims on companies fined in accordance with the rules set out in the Treaty.

After value adjustment it amounts to ECU 64 041 463 (ECU 1 615 162 at 31 December 1993).

The marked increase in this item in 1994 was due to Decision 94/215/ECSC (1) of 16 February 1994, in which the Commission imposed fines totalling ECU 104 364 350 on steel companies for infringing the rules on competition in the marketing of steel beams. ECU 32 151 350 has been paid in fines under this Decision, against which appeals have been lodged with the Court of First Instance by virtually all the companies concerned.

5.4. Interest subsidies to be recovered

This item comprises claims on companies in receipt of a subsidized loan which the Commission has been obliged to ask to reimburse all or part of the interest subsidy already paid.

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 1994, whichever is the lower.

This principle is not applied in the case of securities considered as financial fixed assets (cf. 6.5).

6.2. Composition

Bonds and other fixed-income securities break down as follows:

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6.3. Maturities in 1995

Securities in the portfolio reaching final maturity during 1995 represent the following amounts (ECU):

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6.4. Listed/unlisted securities

The securities portfolio comprises ECU 1 542 367 998 of securities with a stock exchange listing, the balance of ECU 81 199 582 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 paper 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 653 956.

6.5.3. Financial fixed assets are made up as follows (ECU):

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7. TANGIBLE AND INTANGIBLE ASSETS

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The Paris buildings were fully amortized on 31 December 1993. After completion of the work on one of the buildings, ownership was transferred to the EC on 21 December 1994.

The other buildings, which are owned 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.

8. OTHER ASSETS

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9. PREPAYMENTS AND ACCRUED INCOME

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10. AMOUNTS OWED TO CREDIT INSTITUTIONS

The time to maturity on these operations is as follows:

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11. DEBTS EVIDENCED BY CERTIFICATES

Part of the borrowings outstandig at 31 December 1994 will reach maturity during the 1995 financial year. These borrowings amount to ECU 556 401 590.

12. OTHER LIABILITIES

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13. ACCRUALS AND DEFERRED INCOME

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14. PROVISION FOR LIABILITIES AND CHARGES

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15. COMMITMENTS FOR THE ECSC OPERATING BUDGET

In 1994, commitments for the ECSC Operating Budget were as follows:

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16. PROVISION FOR FINANCING THE ECSC OPERATING BUDGET

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17. RESERVES

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The Guarantee Fund is intended to cover lending and borrowing operations. The ECSC's solvency ratio remains within the 14 to 16 % range recommended by a team of international experts to ensure that the structure of the balance sheet remains 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. In order to be able to finance the 1995 Operating Budget and more particularly the social measures for the steel industry for the financial year, ECU 2 million has been withdrawn from the Special Reserve (note 16).

The former Pension Fund originally represented the ECSC's total pension obligations 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 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 outturn of the ECSC Operating Budget.

18.1. Non-budgetary operations

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18.2. Outturn of the ECSC Operating Budget

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18.3. Result for the financial year

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19. INTEREST AND OTHER CHARGES

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20. ADMINISTRATIVE

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 expenditure.

21. OTHER OPERATING CHARGES

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22. INTEREST RECEIVED AND SIMILAR INCOME

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23. OTHER OPERATING INCOME

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24. INCOME RELATING TO THE OPERATING BUDGET

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25. OFF-BALANCE-SHEET COMMITMENTS

25.1. Commitments received

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25.2. Commitments given

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26. CHANGES IN THE FINANCIAL SITUATION FOR THE YEAR ENDING 31 DECEMBER 1994

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OUTTURN OF THE ECSC OPERATING BUDGET FOR 1994

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(1) OJ No L 116, 6. 5. 1994.

(2) See the Commission's outturn forecast of 21 December 1993 (OJ No L 328, 29. 12. 1993).

(3) Aid for projects with a specific impact on the environment: Forecast: lines 3.1: 10 Outturn: lines 3.1: 9,9 3.2: 8 3.2: 7,6

(4) The amount actually received was ECU 1 350, and the amount remaining due to the ECSC at 31 December 1994 was ECU 65 512 615.

(5) Repayments of interest subsidies incorrectly paid on ECSC loans (Articles 54 and 56).

(6) Transfer of the amount (ECU 91 954 337) entered in the ECSC balance sheet as at 31 December 1993 under 'provision for financing the ECSC Operating Budget` to cover the compensation to be paid to two steel companies in respect of losses suffered by them in connection with the quota system (1980 to 1988). Agreement having been reached, the compensation entered in the Budget under 'Requirements: 7. Damages payable` has been settled in the sum of ECU 32 598 643.

(7) Source of these funds: Special Reserve.

(8) Implementation of the first two tranches (1993 and 1994) of the 12th programme in the sum of ECU 19 million and ECU 17 million respectively; Council assent for these two tranches was given on 17 December 1993.