Consolidated Profit & Loss Account

Notes

2011

2010

Income

Interest income

194,701

180,698

Interest expense

-47,733

-47,598

Net interest income

(21)

146,968

133,100

Fee and commission income

6,648

6,704

Fee and commission expense

-165

-119

Net fee and commission income

(22)

6,483

6,585

Dividend income

13,643

15,166

Results from equity investments

(23)

32,128

36,340

Results from financial transactions

(24)

13,282

6,007

Remuneration for services rendered

(25)

18,435

19,256

Other operating income

(26)

6,973

8,722

Total other income

84,461

85,491

Total income

237,912

225,176

Operating expenses

Staff costs

(27)

-39,074

-37,243

Other administrative expenses

(28)

-10,393

-9,681

Depreciation and impairment

(10)

-1,891

-2,795

Other operating expenses

(29)

-140

-70

Total operating expenses

-51,498

-49,789

Operating profit before value adjustments

186,414

175,387

Value adjustments on

Loans

(8)

-36,901

-8,709

Equity investments and associates

(6), (7)

-36,298

-10,967

Guarantees issued

(8)

13,791

-9,784

Total value adjustments

-59,408

-29,460

Share in the result of associates

(7)

-9,253

4,291

Share in the result of subsidiaries

-

1,153

Total share in the result of associates & subsidiaries

-9,253

5,444

Profit before taxation

117,753

151,371

Income tax

(30)

-24,362

-25,150

Net profit

93,391

126,221

Net profit attributable to

Owners of the parent company

93,102

126,055

Non-controlling interests

289

166

93,391

 

126,221

 

6. Equity investments

These equity investments in developing countries are for FMO's account and risk. The movements in net book value of the equity investments are summarized in the following table.

2011

2010

Net balance at January 1

637,802

489,232

Purchases and contributions

179,488

150,153

Re-class to loans

4,787

-794

Re-class from/to associates

-

1,709

Decrease due to loss deconsolidation BanyanTree Growth Capital L.C.C.

-

-1,166

Sales

-86,521

-52,460

Value adjustments

-36,298

-10,967

Changes in fair value

54,108

62,095

Net balance at December 31

753,366

637,802

2011

2010

Equity investments at fair value

581,853

476,437

Equity investments at cost less impairment

171,513

161,365

Net balance at December 31

753,366

637,802

The following table summarizes the equity investments segmented by sector.

2011

2010

Financial institutions - of which investment funds: €519,136 (2010: €430,218

607,371

521,892

Energy

70,320

50,113

Housing

429

176

Agribusiness, food & water

21,709

16,579

Diverse sectors

53,537

49,042

Net balance at December 31

753,366

637,802

7. Investments in associates

The movements in net book value of the associates are summarized in the following table.

2011

2010

Net balance at January 1

50,385

41,577

Purchases and contributions

9,886

7,420

Re-class to/from equity investments

-

-1,709

Re-class from subsidiaries

-

12,346

Sales

-10,134

-15,316

Share in net results

-9,253

4,291

Translation differences

1,189

1,776

Net balance at December 31

42,073

50,385

2011

2010

Associates at cost

12

4,175

Associates at equity method

42,061

46,210

Net balance at December 31

42,073

50,385

The following table summarizes FMO's share in the total assets, liabilities, total income and total net profit/loss of the associates.

Associates at equity method

Associates at cost less impairment

Total

Total assets

106,681

12

106,693

Total liabilities

64,620

-

64,620

Total income

4,643

-

4,643

Total profit/loss

-9,253

-

-9,253

The associates valued at cost less impairment have incurred no cumulative impairment losses (2010: €0).

8. Movement in value adjustments

Movement in value adjustments FMO portfolio

Guarantees

Loans

Total

Balance at January 1, 2010

16,237

275,264

291,501

Additions

11,708

45,551

57,259

Reversals

-1,924

-38,112

-40,036

Exchange rate differences

1,474

19,571

21,045

Write-offs

-

-5,830

-5,830

Balance at December 31, 2010

27,495

296,444

323,939

Additions

-

59,592

59,592

Reversals

-13,791

-22,877

-36,668

Exchange rate differences

-160

1,291

1,131

Write-offs

-

-18,433

-18,433

Balance at December 31, 2011

13,544

316,017

329,561

Movement in value adjustments on loans guaranteed by the State

2011

2010

Balance at January 1

6,183

14,494

Additions

1,287

3,000

Reversals

-140

-414

Write-offs

-526

-10,897

Balance at December 31

6,804

6,183

FMO's own risk participation with regard to FOM (5% to 20%) is not guaranteed. The guaranteed part is recorded under other receivables (see note 11), and this amounts to €961 (2010: €2,161) for the value adjustment recognized in 2011.

10. Tangible fixed assets

Furniture

ICT equipment

Leasehold improvement

Land and buildings due to business combination

Total 2011

Total 2010

Historical cost price at January 1

6,258

22,251

870

5,026

34,405

33,194

Accumulated depreciation at January 1

-5,646

-19,544

-723

-

-25,913

-23,133

Balance at January 1

612

2,707

147

5,026

8,492

10,061

Decrease historical cost price due to sale subsidiary TCX Investment Management Company B.V.

-

-

-

-

-

-93

Decrease accumulated depreciation due to subsidiary TCX Investment Management Company B.V.

-

-

-

-

-

15

Investments

331

1,432

9

1,105

2,877

1,304

Depreciation

-238

-1,259

-47

-347

-1,891

-2,795

Accumulated depreciation on divestments

5

19,346

711

-

20,062

-

Divestments historical cost price

-138

-19,263

-756

-

-20,157

-

Balance at December 31

572

2,963

64

5,784

9,383

8,492

Historical cost price at December 31

6,451

4,420

123

6,131

17,125

34,405

Accumulated depreciation at December 31

-5,879

-1,457

-59

-347

-7,742

-25,913

Balance at December 31

572

2,963

64

5,784

9,383

8,492

 

The land, buildings and equipment due to business combinations (€5,784) relate to Blauser S.A.

21. Interest

Interest income

2011

2010

Interest on loans valued at amortized cost

173,491

159,556

Interest on banks

-235

316

Interest on short-term deposits

2,245

928

Interest on available for sale interest-bearing securities

19,200

19,898

Total interest income

194,701

180,698

Included in the interest on loans is €9,455 (2010: €11,760) related to loans for which value adjustments have been recorded.

Interest expense

2011

2010

Interest on debt securities valued at fair value

-1,512

-2,116

Interest on debt securities valued at amortized cost

-699

-452

Interest on debentures and notes valued at fair value

-38,511

-42,023

Interest on debentures and notes valued at amortized cost

-14,098

-8,715

Interest on derivatives

10,011

6,391

Interest on short-term credits

-2,924

-683

Total interest expense

-47,733

-47,598

22. Net fee and commission income

2011

2010

Prepayment fees

823

291

Other fees (like arrangement, cancellation and waiver fees)

5,825

6,413

Total fee and commission income

6,648

6,704

Charges for the early repayment of debt securities

-165

-119

Total fee and commission expense

-165

-119

Net fee and commission income

6,483

6,585

23. Results from equity investments

2011

2010

Result from the sale of equity investments at cost

8,440

9,597

Result from the sale of equity investments at fair value

23,831

17,524

Result from the sale of associates

-143

9,219

Total results from equity investments

32,128

36,340

The carrying amount of the equity investments valued at cost at the time of sale was €18,717 (2010: €18,207). The carrying amount of the equity investments valued at fair value at the time of sale was €67,804 (2010: €34,254). The release from the available for sale reserve at the time of the sale of equity investments at fair value was €22,103 (2010: €15,963); as a result the net result from sale of equity investments at fair value amounted to a gain of  €1,728 (2010: gain of €1,561).



24. Results from financial transactions

2011

2010

Result on valuation of hedged items

-19,605

13,792

Result on sale and valuation of derivatives designated at fair value (hedging instruments)

19,857

-12,770

252

1,022

Result on sale and valuation of derivatives designated at fair value

41

3,429

Result on sale and valuation of medium-term notes

65

-2,402

106

1,027

Result on sale and valuation of derivatives held for trading1)

2,712

-2,786

Result on sale and valuation of embedded derivatives related to asset portfolio

9,064

7,935

Result on sale of interest-bearing securities

-

1,043

Foreign exchange results

1,256

-2,207

Other

-108

-27

Total results from financial transactions

13,282

6,007

1) Hedge accounting is not applied to these derivatives. These derivatives are used for hedging interest-rate and foreign-exchange risks for loans in emerging market currencies and funding in currencies other than euros and US dollars. FMO has no derivatives for trading purposes.

25. Remuneration for services rendered

2011

2010

Funds and programs managed on behalf of the State:

  • MASSIF

10,508

9,531

  • Infrastructure Development Fund

3,696

3,488

  • Capacity Development

900

1,900

  • Access to Energy Fund

1,836

1,506

NIO

-

650

Syndication fees, remuneration from directorships and others

1,495

2,181

Total remuneration for services rendered

18,435

19,256

Remuneration for managing funds and programs is expressed in gross amounts. Related management expenses are included in operating expenses.



26. Other operating income

2011

2010

Interest on corporate tax

1,981

287

Other operating income

4,992

8,435

Total other operating income

6,973

8,722

Other operating income mainly consists of received payments on written-off loans.



27. Staff costs

2011

2010

Salaries

-23,822

-23,107

Social security costs

-2,486

-2,210

Pension costs

-3,999

-3,409

Temporaries

-1,398

-1,407

Travel and subsistence allowances

-3,079

-2,802

Other personnel expenses

-4,290

-4,308

Total staff costs

-39,074

-37,243

The number of FTEs at December 31, 2011 amounted to 294 (2010: 274 FTEs).



28. Other administrative expenses

2011

2010

Other administrative expenses

-10,393

-9,681

These expenses consist of services from third parties and other operational expenses. The remuneration paid to the Supervisory Board is included in these expenses. At December 31, 2011, the Supervisory Board consisted of six members (2010: seven). The members of the Supervisory Board were paid a total remuneration of €125 (2010: €130).

With reference to Section 2:382a(1) and (2) of the Netherlands Civil Code, the following fees for the financial year have been charged by KPMG Accountants N.V. to the company, its subsidiaries and other consolidated entities.

Fee charged by auditors

2011

2010

Statutory audit of annual accounts

209

214

Other assurance services

105

80

Tax advisory services

-

-

Other non-audit services

10

-

Total

324

294

29. Other operating expenses

 

2011

2010

Other operating expenses

-140

-70

 

The other operating expenses relate mainly to bank charges.



30. Income taxes

Income tax by type

2011

2010

Current income taxes

-23,847

-24,872

Deferred income taxes

-515

-278

Total income tax

-24,362

-25,150

The reconciliation of the statutory income tax rate to the effective income tax rate is as follows:

2011

2010

Profit before taxation

117,753

151,371

Income taxes at statutory rate of 25.0% (2010: 25.5%)

-29,438

-38,600

Increase/decrease resulting from:

  • Settlement with local withholding taxes

1,434

1,147

  • Non-taxable income and expense (participation exemption facility)

3,867

11,702

  • Tax adjustments to prior periods

-52

615

  • Other

-173

-14

Income tax

-24,362

-25,150

Effective income tax rate

20.7%

16.6%

Current income tax receivables

The company paid €28,246 (2010: €2,525) to tax authorities. The remaining current income tax receivables amount to €4,560 (2010: €8). Per year-end 2011 there were no unused tax losses and unused tax credits amount to €496 (2010: €849).

Deferred tax

FMO's deferred income tax assets and liabilities are summarized as follows:

2011

2010

Deferred tax assets

Pension provision

3,204

3,371

Depreciation fixed assets

478

826

Total deferred tax assets

3,682

4,197

Deferred tax liabilities

Fair value measurement of interest-bearing securities

-4,501

-3,256

Total deferred tax liabilities

-4,501

-3,256

Net balance at December 31

-819

941