31982Y1014(05)

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FINANCIAL STATEMENTS OF THE EUROPEAN COAL AND STEEL COMMUNITY FOR 1981 AND 1980

IN ACCORDANCE WITH UNDERTAKINGS GIVEN BY THE COMMISSION ON BEHALF OF THE EUROPEAN COAL AND STEEL COMMUNITY WITH REGARD TO ITS BORROWING ACTIVITIES , THE FOLLOWING FINANCIAL STATEMENT OF THE ECSC , DRAWN UP IN CONFORMITY WITH ARTICLE 78 OF THE TREATY ESTABLISHING THE ECSC , IS PUBLISHED BELOW :

- ALLOCATION OF SURPLUS OF REVENUE OVER EXPENDITURE FOR THE YEARS ENDING 31 DECEMBER 1981 AND 31 DECEMBER 1980 .

THIS FINANCIAL STATEMENT IS ACCOMPANIED BY THE REPORT OF THE COURT OF AUDITORS , PROVIDED FOR UNDER ARTICLE 78 F ( 5 ) OF THE ECSC TREATY , DEALING WITH THE FINANCIAL OPERATIONS OF THE ECSC FOR THE YEAR 1981 , WITH THE EXCEPTION OF THOSE RELATING TO REVENUE AND EXPENDITURE OF AN ADMINISTRATIVE NATURE .

ALLOCATION OF SURPLUS OF REVENUE OVER EXPENDITURE FOR YEARS ENDING 31 DECEMBER 1981 AND 31 DECEMBER 1980

* ( ECU ) *

*1981*1980*

SURPLUS NOT ALLOCATED AT 1 JANUARY*140 569*419 033*

SURPLUS FOR THE YEAR TO BE ALLOCATED*190 199 113*114 483 290*

TOTAL FOR ALLOCATION*190 339 682*114 902 323*

ALLOCATIONS ( ANNEX I , TABLE 28 ) ***

GUARANTEE FUND*40 000 000*30 000 000*

SPECIAL RESERVE*6 500 000*3 500 000*

FORMER PENSION FUND*882 197*316 081*

FINANCIAL ASSISTANCE*75 992 917*66 720 520*

OTHER*66 507 678*14 225 153*

TOTAL ALLOCATIONS*189 882 792*114 761 754*

SURPLUS NOT ALLOCATED AT 31 DECEMBER*456 890*140 569*

THE ACCOMPANYING NOTES FORM AN INTEGRAL PART OF THESE ACCOUNTS .

NOTES TO FINANCIAL STATEMENTS AT 31 DECEMBER 1981 AND 1980

( ALL AMOUNTS GIVEN IN EUROPEAN UNITS OF ACCOUNT )

1 . PRESENTATION OF FINANCIAL STATEMENTS

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 LEVIES , LOANS RAISED ON THE FINANCIAL MARKETS AND DIRECT BANK LOANS .

THE LAYOUT OF THE ANNUAL ACCOUNTS IS BASED ON A COMMISSION PROPOSAL FOR A COUNCIL DIRECTIVE CONCERNING THE ANNUAL ACCOUNTS OF BANKS AND OTHER FINANCIAL INSTITUTIONS .

THE FINANCIAL STATEMENTS AT 31 DECEMBER 1981 INCLUDE THE ALLOCATION OF THE SURPLUS OF REVENUE OVER EXPENDITURE FOR 1981 . AT THE END OF THE YEAR THE COMMITMENTS FINANCED BY THE ALLOCATION OF THIS SURPLUS ARE THOSE ENTERED INTO DURING THE YEAR FOR OPERATIONS TO BE CARRIED OUT BY THE ECSC FOR THE REDEPLOYMENT OF WORKERS AND FOR TECHNICAL AND ECONOMIC RESEARCH . ACTUAL EXPENDITURE FOR THESE OPERATIONS APPEARS IN THE PROFIT AND LOSS ACCOUNTS OF THE YEAR IN WHICH THE COMMITMENT IS PAID .

ALL ECSC ACCOUNTS ARE KEPT IN ECU .

THE FOLLOWING RATES HAVE BEEN USED FOR CONVERTING AMOUNTS EXPRESSED IN CURRENCY IN END-OF-YEAR BALANCE SHEETS INTO ECU :

CONVERTIBLE BELGIAN AND LUXEMBOURG FRANC*41,7467*

GERMAN MARK*2,44436*

DUTCH GUILDER*2,68309*

POUND STERLING*0,566523*

DANISH KRONE*7,94077*

FRENCH FRANC*6,20177*

ITALIAN LIRA*1 303,57*

IRISH POUND*0,686819*

GREEK DRACHMA*62,226300*

U.A.*0,477875*

US DOLLAR*1,08517*

SWISS FRANC*1,95169*

CANADIAN DOLLAR*1,28723*

EMU ( E ) *0,667858*

2 . SUMMARY OF ACCOUNTING POLICIES

SINCE 31 DECEMBER 1980 , THE NON-REALIZED GAIN OR LOSS RESULTING FROM THE CONVERSION AT YEAR-END OF ACCOUNTS IN NATIONAL CURRENCIES IS DEFERRED AND ENTERED IN THE BALANCE SHEET UNDER " ACCRUALS AND DEFERRED INCOME " .

SECURITIES ARE VALUED AT THE LOWER OF COST OR MARKET VALUE . REPURCHASED ECSC BONDS MATURING IN THE YEAR FOLLOWING THE FINANCIAL YEAR OF THE BALANCE SHEET ARE DEDUCTED FROM BONDS IN CIRCULATION AND WITHDRAWN FROM THE MARKET .

REDUCED VALUES HAVE BEEN ENTERED IN THE ACCOUNTS TO TAKE INTO ACCOUNT POTENTIAL RISKS INVOLVED IN CERTAIN CLAIMS .

THE ITEM " LAND AND BUILDINGS " CONSISTS OF A BUILDING VALUED AT COST IN US DOLLAR AND CONVERTED INTO ECU AT YEAR-END .

UP TO 31 DECEMBER 1980 THE RECOVERY OF ISSUING COSTS WAS SPREAD OVER THE TERM OF THE BORROWING . SINCE 1 JANUARY 1981 THESE COSTS ARE MET DIRECTLY . COSTS OUTSTANDING AT 31 DECEMBER 1980 ( 72 009 909 ) ARE RECOVERED IN SEVEN EQUAL YEARLY INSTALMENTS .

3 . DEBT SECURITIES HELD IN PORTFOLIO

THE PORTFOLIO IS MADE UP MAINLY OF GOVERNMENT BONDS AND REPURCHASED ECSC BONDS .

AT 31 DECEMBER 1981 THE BOOK VALUE OF REPURCHASED ECSC BONDS IN PORTFOLIO WAS 118 416 287 .

IN 1981 THE ECSC MADE A PROFIT OF 11 117 285 ON REPURCHASED BONDS , WITH A NOMINAL VALUE OF 67 574 713 , WHICH WERE WITHDRAWN FROM THE MARKET .

4 . LOANS OUTSTANDING

THIS ITEM COVERS LOANS MADE MAINLY TO FIRMS IN THE STEEL INDUSTRY AND COALMINING IN THE MEMBER STATES AND LOANS GRANTED MAINLY TO FIRMS TO FINANCE CONVERSION . THESE LOANS ARE PAID OUT OF BORROWED FUNDS AND TOTAL 5 849 593 168 .

THESE LOANS ARE USUALLY SECURED BY GUARANTEES FROM THE MEMBER STATES , BANKS OR FIRMS AND BY MORTGAGES .

THIS ITEM ALSO INCLUDES LOANS FINANCED FROM THE ECSC'S OWN FUNDS , AS FOLLOWS :

LOANS PAID FROM THE SPECIAL RESERVE FOR FINANCING SUBSIDIZED HOUSING*133 781 234*

LOANS PAID FROM THE PENSION FUND TO OFFICIALS OF THE EUROPEAN COMMUNITIES FOR THE CONSTRUCTION OF HOUSING*22 412 182*

LOANS PAID FROM THE PENSION FUND FOR THE FRIULI STEEL INDUSTRY*3 452 059*

LOANS PAID FROM THE SPECIAL RESERVE FOR TECHNICAL AND ECONOMIC RESEARCH*1 848 361*

LOANS PAID FROM THE SPECIAL RESERVE FOR REDEPLOYMENT*175 102*

*161 668 938*

5 . LAND AND BUILDINGS

THE ECSC OWNS A BUILDING IN WASHINGTON DC , WHICH IS PART OF THE ASSETS SECURING ITS OPERATIONS . THE BUILDING IS LEASED TO THE EUROPEAN COMMUNITIES .

6 . OTHER ASSETS

THIS ITEM MAINLY COMPRISES LEVIES RECEIVABLE ( 10 216 953 ) AND THE MEMBER STATES' CONTRIBUTIONS RECEIVABLE ( 39 466 951 ) .

ON 23 FEBRUARY 1982 THE COUNCIL OF THE EUROPEAN COMMUNITIES DECIDED TO GRANT THE ECSC A CONTRIBUTION OF 62 MILLION FOR 1981 FROM THE GENERAL BUDGET OF THE COMMUNITIES , FOR SOCIAL MEASURES CONNECTED WITH THE RESTRUCTURING OF THE EUROPEAN STEEL INDUSTRY . THIS CONTRIBUTION WILL BE ENTERED INTO THE ACCOUNTS WHEN THE FUNDS ARE PLACED AT THE DISPOSAL OF THE ECSC .

7 . ACCRUALS AND DEFERRED INCOME ( ASSETS )

THIS ITEM COMPRISES INTEREST AND GUARANTEE FEES ACCRUED BUT NOT DUE ( 177 754 411 ) , AND LEVIES DECLARED FOR NOVEMBER AND DECEMBER 1981 BUT NOT PAYABLE UNTIL AFTER 31 DECEMBER 1981 .

8 . LONG-TERM AND MEDIUM-TERM DEBTS

THE DEBT CONSISTS OF 276 PRIVATE AND PUBLIC BOND ISSUES MATURING BETWEEN 1982 AND 2001 .

9 . ACCRUALS AND DEFERRED INCOME ( LIABILITIES )

THIS ITEM COMPRISES INTEREST AND COMMISSIONS ON BORROWINGS ACCRUED BUT NOT YET DUE AT 31 DECEMBER 1981 , AMOUNTING TO 237 210 588 .

NON-REALIZED GAINS FROM CONVERSION , AMOUNTING TO 17 187 455 AT 31 DECEMBER 1981 , ARE ALSO INCLUDED IN THIS ITEM .

10 . COMMITMENTS FOR ECSC OPERATING BUDGET

AT 31 DECEMBER 1981 THE ALLOCATIONS APPROVED BY THE COMMISSION WERE TO BE USED AS FOLLOWS :

FINANCIAL ASSISTANCE ( COMMITMENTS ENTERED INTO )

REDEPLOYMENT MEASURES*251 729 979*

TECHNICAL AND ECONOMIC RESEARCH*78 364 374*

INTEREST SUBSIDIES ON CONVERSION LOANS ( ARTICLE 56 ) *37 112 197*

INTEREST SUBSIDIES ON INDUSTRIAL LOANS ( ARTICLE 54 ) *33 304 580*

AID FOR COKING COAL AND METALLURGICAL COKE*3 592 200*

STEEL INDUSTRY SOCIAL MEASURES*48 631 444*

*452 734 774*

OTHER ( COMMITMENTS TO BE ENTERED INTO )

TECHNICAL AND ECONOMIC RESEARCH*9 595 383*

INTEREST SUBSIDIES ON CONVERSION LOANS ( ARTICLE 56 ) *55 335 798*

INTEREST SUBSIDIES ON INDUSTRIAL LOANS ( ARTICLE 54 ) *14 467 000*

STEEL INDUSTRY SOCIAL MEASURES*1 368 556*

1982 BUDGET*75 000 000*

CONTINGENCIES*30 000 000*

*185 766 737*

AT 31 DECEMBER 1981 THE BREAKDOWN OF ALLOCATIONS DURING THE YEAR AND AT YEAR-END WERE AS FOLLOWS :

*FINANCIAL ASSISTANCE*OTHER*

BALANCE AT 31 DECEMBER 1980*376 741 857*119 259 059*

ALLOCATIONS DURING THE YEAR*75 992 917* ( 38 492 322 ) *

ALLOCATIONS AT YEAR-END* - *105 000 000*

BALANCE AT 31 DECEMBER 1981*452 734 774*185 766 737*

11 . RESERVES

THE GUARANTEE FUND AND THE SPECIAL RESERVE ARE BUILT UP WITH ALLOCATIONS FROM THE SURPLUS OF ECSC REVENUE OVER EXPENDITURE . ALLOCATIONS ARE DECIDED BY THE COMMISSION .

THE FORMER PENSION FUND REPRESENTS THE BALANCE OF THE PENSIONS FUNDED BY THE ECSC PRIOR TO 5 MARCH 1968 . FROM THAT DATE THE MEMBER STATES HAVE ASSUMED COMMITMENTS FOR THE PAYMENTS OF STAFF PENSIONS .

12 . ADMINISTRATIVE EXPENDITURE ( FIXED AMOUNT )

THE ECSC PAID 5 000 000 TO THE ADMINISTRATIVE BUDGET OF THE COMMISSION OF THE EUROPEAN COMMUNITIES TO COVER ITS ADMINISTRATIVE COSTS .

13 . INTEREST RECEIVABLE

AT 31 DECEMBER 1981 THIS ITEM COMPRISED 550 584 254 IN INTEREST RECEIVED FROM LOANS , 88 154 844 IN INTEREST RECEIVED FROM DEPOSITS AND 38 087 751 IN INTEREST RECEIVED FROM FIXED-INCOME SECURITIES .

14 . LEVIES AND FINES

THE ECSC IS AUTHORIZED UNDER THE TREATY TO IMPOSE A LEVY ON THE AVERAGE VALUE OF THE PRODUCTION OF COAL AND STEEL OF THE ENTERPRISES IN THE COMMUNITY . THE LEVY RATE HAS BEEN 0,31 % SINCE 1 JANUARY 1980 .

15 . OTHER COMMITMENTS

AT 31 DECEMBER 1981 THE COMMISSION HAD 13 864 295 OUTSTANDING IN LOANS IRREVOCABLY CONTRACTED BUT NOT YET PAID OVER .

16 . GUARANTEES GIVEN

THE ECSC GUARANTEES LOANS MADE TO VARIOUS COAL AND STEEL COMPANIES BY THIRD PARTIES ; SUCH GUARANTEES ARE IN TURN SECURED BY GUARANTEES RECEIVED BY THE ECSC . GUARANTEES GIVEN AMOUNT TO 4 422 426 AT 31 DECEMBER 1981 .

17 . COMMITMENTS ARISING FROM FORWARD TRANSACTIONS

AT 31 DECEMBER 1981 , THE ECSC HAD ENTERED INTO SWAP OPERATIONS INVOLVING OBLIGATIONS FOR THE FORWARD PURCHASE OF CURRENCIES AMOUNTING TO 79 295 136 AND OBLIGATIONS FOR THE FORWARD SALE OF CURRENCIES AMOUNTING TO 84 938 096 .