Notes to the specific items of the consolidated profit and loss account

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