Commission staff working document accompanying the Annual Report from the Commission to the European Parliament, the Council and the Court of Auditors on the Guarantee Fund and the management thereof in 2009 COM(2010)353 final
Date: 2010-07-02
Institutions: European Commission
Subjects: activity report, credit guarantee, financial management, fund (EU)

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EUROPEAN COMMISSION 

Brussels, 2.7.2010 
SEC(2010)805 final 

COMMISSION STAFF WORKING DOCUMENT 

accompanying the 

Annual report from the Commission to the European Parliament,  
the Council and the Court of Auditors  
on the Guarantee Fund  
and the management thereof in 2009 

COM(2010)353 final 

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CONTENTS 

1. 

1.1. 

1.2. 

Guarantee Fund — Management report as at 31 December 2009 ............................... 4 

Development of the Fund in 2009 — overview........................................................... 4 

Situation of the Fund.................................................................................................... 5 

1.2.1.  The Fund’s resources as at 31 December 2009............................................................ 5 

1.2.2.  The Fund’s assets as at 31 December 2009 ................................................................. 5 

1.3. 

General and segment-by-segment analysis of the Fund............................................... 6 

1.3.1.  Analysis of the results of the Fund............................................................................... 6 

1.3.2.  Segment-by-segment analysis...................................................................................... 6 

1.3.2.1.  Analysis of money market operations.......................................................................... 6 

1.3.2.2.  Analysis of bond portfolio results ................................................................................ 8 

1.4. 

Analysis of performance and interest rate risk........................................................... 11 

1.4.1. 

Interest rate risk.......................................................................................................... 14 

1.4.2.  Performance ............................................................................................................... 15 

2. 

2.1. 

2.2. 

2.3. 

3. 

3.1. 

3.2. 

Statement of financial position of the Fund as at 31 December 2009 ....................... 17 

Economic outturn account (Statement of financial performance) for the year ending 
on 31 December 2009 ................................................................................................ 17 

Balance sheet (Statement of financial position) as at 31 December 2009 ................. 18 

Cash flow statement as at 31 December 2009 ........................................................... 21 

Notes on the financial statements............................................................................... 22 

General disclosures .................................................................................................... 22 

Significant accounting policies .................................................................................. 22 

3.2.1.  Basis of preparation.................................................................................................... 22 

3.2.2.  Significant accounting and judgments and estimates................................................. 22 

3.2.3.  Summary of significant accounting policies .............................................................. 23 

3.2.3.1.  Foreign currency conversion...................................................................................... 23 

3.2.3.2.  Cash and cash equivalents.......................................................................................... 23 

3.2.3.3.  Short-term investments .............................................................................................. 23 

3.2.3.4.  Contributions.............................................................................................................. 24 

3.2.3.5.  Securities lending activity .......................................................................................... 24 

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3.2.3.6.  Taxation ..................................................................................................................... 24 

3.3. 

Financial risk management ........................................................................................ 25 

3.3.1. 

Interest rate and liquidity risks................................................................................... 25 

3.3.2.  Credit risk................................................................................................................... 28 

3.4. 

3.5. 

3.6. 

3.7. 

3.8. 

3.9. 

Short-term investments — Available for sale assets.................................................. 31 

Cash and cash equivalents.......................................................................................... 32 

Contributions.............................................................................................................. 32 

Current liabilities........................................................................................................ 32 

Financial operations revenue...................................................................................... 33 

Financial operations expenses.................................................................................... 33 

3.10. 

Subsequent events ...................................................................................................... 33 

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1. 

GUARANTEE FUND — MANAGEMENT REPORT AS AT 31 DECEMBER 20091 

1.1. 

Development of the Fund in 2009 — overview 

As at 31 December 2009 the total assets (excluding accrued interest) of the Guarantee Fund 
(‘the Fund’) stood at EUR 1 220.2 million against EUR 1 071.8 million on 31 December 2008, 
an increase of EUR 148.4 million. 

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2009

2008

1275

1250

1225

1200

1175

1150

1125

1100

1075

1050

1025

1000

Jan

Mar

May

Jul

Sep

Nov

Figure 1: Trend in total assets in 2009 and 2008 

The increase in total assets was mainly due to a capital payment of EUR 91.9 million from the 
European Commission on 23 January 2009 and to coupon payments of EUR 38.2 million. 

The  net  operating  result  totalled  EUR 40.9 million  on  31  December  2009  compared  with 
EUR 48.0 million on 31 December 2008. Interest income on AFS (available for sale) assets 
(net of the premium/discount spread) totalled EUR 38.2 million, making up 93 % of the total 
result recorded on 31 December 2009. Interest income on cash and cash equivalents totalled 
EUR 3.5 million,  or  9 %  of  the  total  result.  The  rest  (-2 %)  reflects  the  net  result  of  income 
from  securities  lending  activity  (EUR 77 047.72)  and  other  financial  charges  (adding  up  to 
EUR -803 818.74).  

1 

Report prepared by the EIB, which manages the Guarantee Fund’s assets for the Commission. 

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1.2. 

Situation of the Fund 

1.2.1.  The Fund’s resources as at 31 December 2009 

The Fund’s resources increased by EUR 91.9 million, or 23 %,  from  EUR  402.5  million  on 
31 December 2008 to 494.4 EUR million on 31 December 2009. 

This is explained by the movements shown in the table below: 

Resources 

Situation as at  

Movements 

Situation as at 

31/12/2008 

in 2009 

31/12/2009 

Provisioning 

Repayment of surplus 

Activation of guarantee 

Recovery of amounts guaranteed 

Repayment of Fund (9 %) 

+ 

- 

- 

+ 

- 

2 805 005 162.91

91 960 000.00 

2 896 965 162.91

(1 775 870 000.00) 

0.00 

(1 775 870 000.00)

(477 860 856.19) 

576 705 008.19

(725 521 526.79)

0.00 

0.00 

0.00 

(477 860 856.19)

576 705 008.19

(725 521 526.79)

Balance 

402 457 788.12

91 960 000.00 

494 417 788.12

1.2.2.  The Fund’s assets as at 31 December 2009 

The Fund’s holdings as at 31 December 2009 excluding accrued interest totalled  

EUR 1 220.2 million, broken down as follows: 

EUR 153.3 million in the monetary portfolio (nominal value of interbank term deposits); 
EUR 36.6 million in other cash equivalents (commercial papers at cost); 
EUR 1.1 million in the current accounts; 
EUR 1 029.2 million in the available for sale (AFS) investment portfolio (market value of 
fixed-rate and floating rate bonds (excluding accrued interest)). 

The Fund operates in one currency only, the euro. 

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1.3. 

General and segment-by-segment analysis of the Fund 

1.3.1.  Analysis of the results of the Fund 

Overall,  during  the  reporting  period  from  1  January  2009  to  31  December  2009  the  Fund 
produced net revenue of EUR 40.95 million. Investment income on 31 December 2009 was as 
follows: 

Interest income on cash and cash equivalents 

Interest income on AFS assets 

Income from securities lending activity 

Commission and financial charges 

Total 

January–December 2009 

(in million EUR) 

3.49 

38.18 

0.08 

-0.80 

40.95 

The performance of the Fund portfolio was monitored on a marked to market (MTM) basis. 
Over  2009,  the  portfolio  delivered  a  4.56 %  MTM  return,  outperforming  its  benchmark  by 
77.80 basis points. 

1.3.2. 

Segment-by-segment analysis 

1.3.2.1.  Analysis of money market operations 

Money-market  investments  (excluding  accrued  interest)  totalled  EUR 190.9 million  on 
31 December 2009, compared with EUR 203.6 million a year before. 

The  EUR 12.7 million  decrease  was  due  to  a  shift  of  investments  from  the  money  market 
portfolio to the bond portfolio. 

•  Evolution of money-market rates in 2009 

In  2009  the  economic  situation  continued  to  deteriorate.  This  had  an  impact  on  money 
markets in a variety of forms. Market liquidity was very low and characterised by high levels 
of volatility of EURIBOR/LIBOR fixings. Central banks reacted by drastically cutting interest 
rates and injected liquidity into the markets by widening the eligibility criteria for their open-
market operations and by increasing the size, maturity and number of operations to ensure that 
all credit institutions have access to liquidity. The ECB reference rate decreased from 2 % to 
1 % during the first half of 2009. 

In this context interest rates reached all-time record lows for Western Europe which lasted for 
more than six months. 

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Figure 2 shows the movements in the one- and three-month Euribor during 2009. 

Figure 2: Movements in money-market rates during 2009 (source: Reuters) 

•  Profile of counterparties 

In accordance with the agreement between the Commission and the EIB on the management 
of  the  Fund,  all  banks  with  which  deposits  are  placed  should  have  a  minimum  short-term 
credit rating of P-1 (Moody’s or equivalent). The breakdown, including accrued interest, is as 
follows: 

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A1/P-1
19%

A2/P-1
11%

Aaa/P-1
6%

Aa2/P-1
11%

Aa3/P-1
53%

Figure 3: Short-term interbank investments by type of counterparty on 31 December 20092 

•  Geographical breakdown 

As  regards  diversification  of  counterparty  location,  the  EIB  is  pursuing  its  objective  of 
diversifying  the  geographical  distribution  across  the  countries  of  the  European  Union  by 
placing the short-term deposits in a number of banks located in the main EU financial centres. 
This allows it to seek better market conditions and to obtain the most competitive yield. 

1.3.2.2.  Analysis of bond portfolio results 

The bond portfolio, seen as a long-term investment portfolio, is made up of euro-denominated 
securities  initially  acquired  with  the  intention  of  holding  them  until  maturity.  In  the  Fund’s 
financial statements these securities are classified as ‘available for sale’ (AFS) in line with EC 
accounting rule 11. On 31 December 2009, the market value (excluding accrued interest) of 
fixed-rate  securities  with  a  residual  period  to  maturity  of  less  than  three  months  totalled 
EUR 15.2 million, between 3 months and one year EUR 73.5 million and between one and 10 
years EUR 901.3 million. 

The  starting  value  of  the  securities  in  this  portfolio  is  the  acquisition  cost.  The  difference 
between the cost and the redemption value is the premium/discount spread, which is divided 
pro rata temporis over the remaining life of each of the securities using the effective interest 
rate method, as specified in the EC accounting rules. 

On 31 December 2009, the nominal value of the investment bond portfolio (fixed and floating 
rate notes) was EUR 1 003.9 million, against a clean market value of EUR 1 029.2 million. 

In accordance with the 2009 annual investment strategy, the global (modified) duration of the 
bond portfolio decreased over 2009 to 3.1 years at the end of the year. On 31 December 2009 

2

On 31 December 2009 short-term interbank investments including accrued interest totalled EUR 190.0 million. 

EUR 153.4 million were invested in short-term deposits and EUR 36.6 million in discount papers. The discount papers have the following 

ratings: EUR 10.5 m Aaa/P-1; EUR 8.0 m Aa3/P-1; EUR 18.1 m A1/P-1. 

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the  market  value  (excluding  accrued  interest)  of  the  investment  bond  portfolio  came  to 
EUR 1 029.2 million  compared  with  a  book  value  of  EUR 1 001.7 million  (including 
premiums/discounts),  which  gives  an  unrealised  fair  value  gain  of  EUR 27.5 million, 
compared  with  an  unrealised  fair  value  gain  of  EUR 11.5 million  and  a  market  value 
(excluding accrued interest) of EUR 868.2 million on 31 December 2008.  

During  2009  the  euro  area  2-  to 10-year yield  curve spread  steepened  by 84  basis points to 
204 basis points. This movement occurred as a result of short-term yields declining by 40.6 
basis points, whereas long-term yields increased by 43.4 basis points, as shown in Figure 4.  

Figure  4:  Steepening  of  euro  area  yield  curve  during  2009  using  German  government 
benchmark bonds (source: Bloomberg) 

In accordance with the 2009 approved investment strategy and with the investment guidelines, 
a  total  nominal  amount  of  EUR 175.5 million  was  invested  in  fixed-rate  sovereigns, 
government guaranteed bonds and AAA agency securities with maturities ranging from one to 
five years. The objective of all these transactions was to maximise the expected performance 
and  maintain  a  conservative  risk  profile  with  respect  to  the  relevant  country  allocation  in 
relation to the corresponding benchmark. The charts below show the total investments in 2009 
and the country diversification of the portfolio. 

2009 Investments

Country exposure

48%

SAS Bonds

5%4%3%3%

7%

28%

52%

Government
Guaranteed Bonds

22%

28%

Austria

France

The Netherland

Spain

Germany

Greece

Ireland

Portugal

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On  1  January  2009,  a  total  nominal  amount  of  EUR 83.7 million  of  redemptions  on  the 
securities portfolio was scheduled for the year, split as follows: 

•  EUR 73.7 million for the fixed rate, and 

•  EUR 10.0 million for the variable rate. 

Furthermore,  no  new  investments  in  floating  rate  notes  (FRN)  were  executed  during  2009. 
EUR 41 million  were  executed  during  the  first  quarter  of  2009  in  the  new  government 
guaranteed asset class instead of the FRN investments envisaged in the 2008 strategy. 

•  Breakdown  of  the  investment  portfolio  between  fixed-rate  and  variable-rate  securities 

(nominal value): 

Variable rate
4%

Fixed Rate
96%

Figure 6: Breakdown of the investment portfolio between fixed-rate and variable-rate securities 

•  Redemption profile of investment portfolio (nominal value) 

as at 31 December 2009 

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200

150

100

50

0

Variable rate

Fixed rate

2010 2011 2012 2013 2014 2015 2016 2017 2018

Figure 7: Investment portfolio: Redemption profile as at 31 December 2009 

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The latest final maturity date for fixed-rate securities on 31 December 2009 was 4 July 2018. 

•  Profile of issuers 

All the securities held in the portfolio are in line with the management guidelines and meet 
the following criteria: 

–  Securities issued by Member States: minimum rating Baa3; 

–  Securities issued by a supranational institution, other States or public companies: minimum 

rating Aa2; 

–  Covered bonds: rating Aaa; 

–  Securities issued by banks and corporations: minimum rating Aa2. 

The profile of issuers on 31 December 2009 was as follows: 

CORP ORA TE A a1
0.5%

COVERED B OND A aa
14.3%

B A NKS A aa
0.5%

P UB LIC COM P A NY A aa
21.0%

M EM B ER STA TE B aa1
2.5%

M EM B ER STA TE A 2
8.9%

M EM B ER STA TE A 1
2.7%

M EM B ER STA TE A a2
12.3%

M EM B ER STA TE A aa
33.6%

M EM B ER STA TE A a1
3.7%

Figure 8: Investment portfolio: Profile of issuers as at 31 December 2009 

1.4. 

Analysis of performance and interest rate risk 

The  performance  of  the  Fund  is  monitored  on  a  marked-to-market  (MTM)  basis  against  a 
composite  benchmark  index.  This  index  is  the  result  of  combination  of  the  following  sub-
indices: 

–  Euribid 1M for money-market operations; 

–  Euribid 3M for floating rate notes and fixed-rate bonds with less than one year to maturity; 

–  IBOXX  EUR  sovereign  indices  for  fixed-rate  bonds  issued  by  sovereign  (or  similar) 

issuers, split by maturity buckets;  

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–  IBOXX  EUR  collateralised  covered3  indices  for  fixed-rate  bonds  issued  by  corporate  (or 

similar) issuers, split by maturity buckets. 

Index weightings are based on portfolio composition and are reviewed as follows: 

•  on the last day of each month: the dates which define the time buckets (up to 1 year, from 1 
year  to  3  years,  from  3  years  to  5  years,  from 5 years to 7 years and from 7 years to 10 
years)  are  updated.  As  a  consequence,  the  shifts  between  buckets  due  to  the  ageing  of 
existing  positions  are  taken  into  account  only  once  per  month  at  the  end  of  the  month, 
following the same procedure underlying management of the IBOXX indices; 

•  during the month, whenever a change higher than 5 % in one of the asset classes (above or 

below the last benchmark adjustment) is observed. This change can be the result of: 

–  the impact of a contribution from the European Commission to the portfolio (external cash 

flows from the European Commission); 

–  the impact of a withdrawal from the portfolio to the European Commission (external cash 

flows to the European Commission); 

–  the impact of a transaction settled (sales and purchases); 

–  the impact of a redemption; 

–  the sum of the impact of previous events accumulated from the last benchmark adjustment, 

also taking into consideration the changes in the clean values of the positions. 

3 

The European Commission and the EIB agreed to adopt the IBOXX collateralised covered indices instead of the IBOXX EUR 
AAA corporate indices starting on 1 January 2009. 

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Bucket (years) 

Performance benchmark 
sector 

Instrument 

Percentage of total 
portfolio (2009 average) 

0-1 

1-3 

3-5 

5-7 

1 m 

3 m 

Money market 

FRN and fixed-rate bonds 

Sovereign 

Covered bonds 

Sovereign 

Covered bonds 

Sovereign 

Covered bonds 

Fixed- 

rate 

bonds 

7-10 

Sovereign 

Covered bonds 

Total 

20.63 % 

11.03 % 

18.09 % 

0.30 % 

14.85 % 

3.03 % 

9.97 % 

4.26 % 

15.55 % 

2.29 % 

100 % 

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1.4.1. 

Interest rate risk 

The  interest  rate  risk  sensitivity  of  the  MTM  value  of  the  portfolio  mainly  stems  from  its 
fixed-rate exposure. A one basis point (bp) increase in interest rates reduces the value of the 
portfolio  by  EUR 378 621.00,  of  which  EUR 375 571.00  is  related  to  the  fixed-rate  bond 
exposure. The total modified duration of the Fund stood at 3.01 years at the end of 2009. 

GF Sub-Portfolios 

Market Value 
(excluding accrued 
interest) 

Modified 
Duration 
(Years) 

Floating Rate Notes  

39 255 400 

Fixed-Rate Bonds 

989 959 978 

Money-Market Deposits

189 909 298 

Cash Account 

1 106 422(4) 

0.22 

3.66 

0.11 

Interest Rate 
Exposure 

(+/-1 bp) 

-/+ 906 

-/+ 375 571 

-/+ 2 144 

Total GF 

1 220 231 098 

3.01 

-/+ 378 621 

4 

The  EUR  1.2  million  ‘cash  account’  balance  reported  in  this  table  does  not  include  any  payments  relating  to 
commissions  or  fees.  This  explains  why  it  does  not  match  the  EUR  1.1  million  total  for  the  ‘current  account’ 
balance  reported  in  Section  2.2.  The  ‘cash  account’  balance  is,  however,  reset  at  the  beginning  of  each  year  to 
match the total balance of the current accounts. 

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1.4.2.  Performance 

Over 2009, the portfolio delivered a 4.56 % MTM return. The trend in the portfolio return and 
the excess return over its benchmark are shown in the table below. 

Portfolio 

Out-performance 

Market value 
(including accrued 
interest) 

Monthly  
 return  
(absolute return in 
%) 

YTD  
 return  
(absolute return in 
%) 

Monthly 
excess return  
(in %) 

YTD  
excess return  
(in %) 

31/1/09

1 187 673 029 

-0.0017 

-0.0017 

0.1533 

0.1533 

28/2/09

1 190 301 740 

0.2213 

0.2197 

-0.3734 

-0.2192 

31/3/09

1 197 781 395 

0.6839 

0.9051 

-0.0159 

-0.2367 

30/4/09

1 203 105 009 

0.4445 

1.3536 

31/5/09

1 201 424 126 

-0.1397 

1.2120 

0.2128 

0.1457 

-0.0225 

0.1252 

30/6/09

1 210 493 093 

0.7549 

1.9760 

0.0160 

0.1424 

1/7/09(1)

1 206 816 404 

-0.3037 

1.6662 

-0.3098 

-0.1736 

31/7/09(2)

1 222 003 621 

1.2585 

2.9457 

0.3284 

0.1587 

31/8/09

1 229 191 705 

0.5882 

3.5512 

0.2412 

0.4075 

30/9/09

1 238 624 734 

0.7674 

4.3459 

0.2728 

0.6920 

31/10/09

1 240 815 053 

0.1768 

4.5304 

0.0123 

0.7060 

30/11/09

1 245 885 453 

0.4086 

4.9576 

0.0647 

0.7760 

31/12/09

1 241 139 626 

-0.3809 

4.5577 

0.0048 

0.7780 

(1) 

Returns calculated from 30/6/2009 to 1/7/2009. 

(2) 
the benchmark stood at 0.9363 %. 

Returns calculated from 1/7/2009 to 31/7/2009: the total July return on the portfolio stood at 0.9509 % and the total July return on 

During  2009,  the  money-market  rates  decreased,  following  the  extraordinary  measures 
implemented by the central banks to fight the economic crisis. The Euribor 1-month rate stood 
at 0.453 % and the Euribor 3-month rate at 0.700 % on 31 December 2009. 

During  the  first  half  of  the  year,  the  fixed-income  markets  were  marked  by  a  volatile 
environment,  which  produced  a  negative  impact  on  the  return  on  the  securities  portfolio  in 
January and May and a positive impact in February, March and April. 

During the second half of the year, the 1-year to 5-years tenors of the yield curve decreased, 
generating  a  positive  impact  on  the  return  on  the  securities  portfolio.  During  the  last  two 

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weeks  of  December,  the  significant  widening  of  the  credit  spread  on  Greece  resulted  in  a 
negative return on the portfolio. 

Starting  on  1  July  2009,  the  floating  rate  notes  have  been  valued  by  using  market  quotes 
instead  of  prices  derived  from  models.  This  change  produced  an  impact  of  about  -30  basis 
points on the return on the portfolio and had a similar effect in terms of excess return on the 
portfolio over its benchmark. 

As a result, the portfolio delivered an excess return of 77.80 basis points over its benchmark 
for the whole year 2009. 

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2. 

STATEMENT OF FINANCIAL POSITION OF THE FUND AS AT 31 DECEMBER 2009 

The  financial  statements  for  the  Fund  have  been  prepared  by  the  EIB  in  accordance  with 
International  Financial Reporting Standards (IFRS) and the accounting rules adopted by the 
European Commission, in particular ‘Accounting rule 11 — Financial assets and liabilities’, 
dated September 20045. These financial statements are presented in euro. This is the financial 
statement  for  the Fund’s  assets managed by the  EIB. The annual accounts of the Guarantee 
Fund  for  the  year  ending  on  31  December  2009  have  been  audited  and  certified  by  an 
independent auditor. 

2.1. 

Economic  outturn  account  (Statement  of  financial  performance)  for  the  year 
ending on 31 December 2009 

Notes 

Year to 
 31.12.2009 
 EUR 

Year to 
 31.12.2008 
 EUR 

Financial operations revenue 

Interest income 

Interest income on cash and cash equivalents 

Interest income on available for sale assets 

Realised gains/loss on sale of available for sale assets 

Income from securities lending activity 

Financial operations expenses 

Other financial charges 

Thereof: Management fees 

7 

8 

41 676 644.38 

47 665 167.17

3 496 637.06 

8 043 015.28

38 180 007.32 

39 622 151.89

0.00 

1 085 236.81

77 047.72 

52 156.81

(803 818.74) 

(784 325.01)

(687 539.60) 

(658 322.32) 

SURPLUS FROM NON-OPERATING ACTIVITIES 

40 949 873.36 

48 018 235.78

SURPLUS FROM ORDINARY ACTIVITIES 

40 949 873.36 

48 018 235.78

ECONOMIC RESULT OF THE YEAR 

40 949 873.36 

48 018 235.78

The accompanying notes form an integral part of these financial statements.

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This  is  based  on  revised  standards  IAS  32  and  39,  as  issued  by  the  IASB  on  18  December  2003,  and,  consequently,  does  not 
integrate the provisions set out in the version of IAS 39 endorsed by the European Commission on 19 November 2004. 

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2.2. 

Balance sheet (Statement of financial position) as at 31 December 2009 

ASSETS 

Notes 

31.12.2009 

31.12.2008 

EUR 

EUR 

CURRENT ASSETS 

Current receivables 

Other current receivables 

Thereof: Receivables from securities lending activity 

Total current receivables 

3 626.09 

3 626.09 

3 626.09 

0.00

0.00

0.00

Short-term investments 

4 

Available for sale portfolio — cost 

1 004 786 115.50 

857 292 051.50

Available for sale portfolio — actuarial difference 

(3 096 484.22) 

(633 286.00)

Available for sale portfolio — adjustment to fair value 

27 525 747.60 

11 509 579.98

Available for sale portfolio — accruals 

20 197 940.31 

18 781 321.92

Total short-term investments 

1 049 413 319.19 

886 949 667.40

Cash and cash equivalents 

Current accounts 

Short-term deposits — nominal  

Accrued interest on short-term deposits 

Other cash equivalents — cost 

Accrued interest on other cash equivalents 

Total cash and cash equivalents 

5 

1 078 498.12 

1 209 530.44

153 300 000.00 

182 557 991.00

113 282.91 

872 562.49

36 554 203.91 

19 842 008.01

34 830.41 

15 625.58

191 080 815.35 

204 497 717.52

Total current assets  

1 240 497 760.63 

1 091 447 384.92

TOTAL 

1 240 497 760.63 

1 091 447 384.92

EN 

18 

   EN 

 
  
  
  
  
 
  
  
  
 
  
  
 
  
  
  
  
  
  
 
  
 
  
  
  
  
  
  
  
  
 
  
 
  
  
  
  
  
  
  
  
  
 
  
  
  
  
 
  
 
 
 
 
LIABILITIES 

A. EQUITY 

Capital  

Reserves 

Note 

2009 

EUR 

2008 

EUR 

494 417 788.12 

402 457 788.12

First-time application — Fair value reserve 

152 812.75 

56 045.30

Revaluation to fair value of available for sale assets 

27 525 747.60 

11 509 579.98

Accumulated surplus 

Results brought forward 

Economic result of the year 

Total equity 

B. CURRENT LIABILITIES 

Accounts payable 

Others 

Total current liabilities  

676 733 999.20 

628 715 763.42

40 949 873.36 

48 018 235.78

1 239 780 221.03 

1 090 757 412.60

6 

717 539.60 

717 539.60 

689 972.32

689 972.32

TOTAL 

1 240 497 760.63 

1 091 447 384.92

The accompanying notes form an integral part of these financial statements.

EN 

19 

   EN 

 
 
  
  
  
  
 
  
  
  
 
  
  
  
  
 
  
  
  
  
  
 
  
 
  
  
  
  
  
 
  
Statement of changes in equity for the year ending on 31 December 2009 

Equity 
(EUR) 

Capital 

Reserves 

Accumulated 
surplus/deficit 

Economic result 
of the year 

Total 

Balance on 1.1.2008 

527 176 693.70

268 318.67

(3 895 732.16) 

575 841 062.23

52 874 701.19

1 152 265 043.63 

Fair value 
reserve — 
First-time 
application 

Changes in fair 
value of 
available for 
sale assets 

Fair  value  adjustment  —  Available 
for sale reserve 

First-time  application  —  Recycling 
due to sale of investments 

0.00 

0.00 

15 405 312.14 

0.00 

(212 273.37)

Payment to the European Union 

(125 750 000.00)

Recovery of guarantees called 

1 031 094.42

0.00 

0.00

Allocation of the economic result of 
2007 

0.00  

0.00  

0.00 

0.00 

0.00 

0.00 

0.00

0.00 

0.00 

0.00 

0.00

15 405 312.14 

(212 273.37) 

(125 750 000.00) 

1 031 094.42 

52 874 701.19

(52 874 701.19)

0.00 

Result of 2008  

0.00 

0.00 

0.00  

0.00 

48 018 235.78

48 018 235.78 

Balance on 31.12.2008 

402 457 788.12

56 045.30

11 509 579.98 

628 715 763.42

48 018 235.78

1 090 757 412.60 

Fair  value  adjustment  —  Available 
for sale reserve 

First-time  application  —  Recycling 
due to sale of investments 

0.00

0.00

Payment to the European Union 

91 960 000.00

Recovery of guarantees called 

Allocation of the economic result of 
2008 

Result of 2009 

0.00

0.00

0.00

0.00

16 016 167.62 

96 767.45

0.00

0.00

0.00

0.00

0.00 

0.00 

0.00 

0.00 

0.00 

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

48 018 235.78

(48 018 235.78)

16 016 167.62 

96 767.45 

91 960 000.00 

0.00 

0.00 

0.00

40 949 873.36

40 949 873.36 

Balance on 31.12.2009 

494 417 788.12

152 812.75

27 525 747.60 

676 733 999.20

40 946 247.27

1 239 780 221.03 

EN 

20 

EN 

 
  
 
  
2.3. 

Cash flow statement as at 31 December 2009 

Investing activities 

Interest received on cash and cash equivalents 

   Management fee paid during the year 

Bank charges/audit fees paid during the year 

Year to 2009 

Year to 2008 

EUR 

EUR 

4 236 711.81 

8 582 713.48

(658 322.32) 

(678 951.39)

(117 929.14) 

(124 302.69)

Purchase of investments — Available for sale portfolio 

(228 822 855.00) 

(147 585 260.00)

Proceeds of investments — Available for sale portfolio 

83 730 000.00 

179 415 215.96

Interest received — Available for sale portfolio 

36 922 145.60 

40 834 028.61

Income from securities lending activity 

73 421.63 

52 156.81

Net cash flows from investing activities 

(104 636 827.42) 

80 495 600.78

Financing activities 

Contributions received from the European Commission  

91 960 000.00 

 0.00

Contributions repaid to the European Commission 

Recovery of interventions 

0.00 

(125 750 000.00)

0.00 

1 031 094.42

 Net cash flows from financing activities 

91 960 000.00 

(124 718 905.58)

Net increase/(decrease) in cash and cash equivalents 

(12 676 827.42) 

(44 223 304.80)

Cash and cash equivalents at beginning of financial year 

203 609 529.45 

247 832 834.25

Cash and cash equivalents at end of financial year 

190 932 702.03 

203 609 529.45

Cash and cash equivalents are composed of: 

Current accounts 

Short-term deposits  

Bills maturing within three months of issue 

Total cash and cash equivalents 

1 078 498.12 

1 209 530.44

153 300 000.00 

182 557 991.00

36 554 203.91 

19 842 008.01

190 932 702.03 

203 609 529.45

The accompanying notes form an integral part of these financial statements.

EN 

21 

   EN

 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
 
 
 
 
 
 
 
3. 

NOTES ON THE FINANCIAL STATEMENTS 

3.1. 

General disclosures 

The rules and principles for the management of the Guarantee Fund (the ‘Fund’) are 
set out in the Agreement between the European Commission (‘the Commission’) and 
the  European  Investment  Bank  (‘the  EIB’)  dated  25  November  1994  and  the 
subsequent amendments dated 17/23 September 1996, 8 May 2002 and 25 February 
2008. 

The  main  principles  of  the  Fund,  as  extracted  directly  from  the  Agreement,  are  as 
follows: 

•  The  Fund  will  operate  in  one  single  currency,  i.e.  euro  (EUR).  It  will  invest 

exclusively in this currency in order to avoid any exchange rate risk. 

•  Management of the Fund will be based on the traditional rules of prudence adhered 
to for financial activities. Particular attention will be paid to reducing the risks and 
to  ensuring  that  the  managed  assets  have  a  sufficient  degree  of  liquidity  and 
transferability, taking into account the commitments which the Fund will have. 

3.2. 

Significant accounting policies 

3.2.1.  Basis of preparation 

The  financial  statements  for  the  Fund  have  been  prepared  in  accordance  with  the 
accounting rules adopted by the Accounting Officer of the European Commission, in 
particular  ‘Accounting  rule  11  —  Financial  assets  and  liabilities’6,  dated  December 
2004 and updated in October 2006 and December 2009. 

3.2.2. 

Significant accounting and judgments and estimates 

Preparation  of  financial  statements  in  conformity  with  the  accounting  rules  adopted 
by the Accounting Officer of the European Commission requires use of certain critical 
accounting estimates. It also requires EIB management to exercise its judgment in the 
process  of  applying  the  Fund’s  accounting  policies.  The  areas  involving  a  higher 
degree  of  judgment  or  complexity,  or  areas  where  assumptions  and  estimates  are 
significant to the financial statements, are indicated. 

The most significant uses of judgments and estimates are in the following areas: 

•  Fair value of financial instruments  

Where  the  fair  values  of  financial  assets  and  financial  liabilities  recorded  on  the 
balance  sheet  cannot  be  derived  from  active  markets,  they  are  determined  using  a 
variety of valuation techniques that include use of mathematical models. The input to 

6

EN 

This is based on revised standards IAS 32 and 39, as issued by the IASB on 18 December 2003, and, consequently, does not integrate 
the provisions set out in the version of IAS 39 endorsed by the European Commission on 19 November 2004. 

22 

   EN

 
                                                 
 
these models is taken from observable markets where possible, but where this is not 
feasible a degree of judgment is required in establishing fair values. 

•  Impairment losses on financial instruments  

The Fund reviews its financial instruments at each reporting date to assess whether an 
allowance  for  impairment  should  be  recorded  in  the  economic  outturn  account.  In 
particular,  judgment  by  EIB  management  is  required  in  estimating  the  amount  and 
timing of future cash flows when determining the level of allowance required. 

3.2.3. 

Summary of significant accounting policies 

3.2.3.1.  Foreign currency conversion 

These  financial  statements  are  presented  in  euro  (EUR),  which  is  also  the  Fund’s 
operating currency. 

Monetary  assets  and  liabilities  denominated  in  currencies  other  than  euro  are 
converted into euro at the exchange rate prevailing on the date of the balance sheet. 
The  gain  or  loss  arising  from  such  conversion  is  recorded  in  the  economic  outturn 
account. 

The items of the economic outturn account are converted into euro on the basis of the 
exchange rates prevailing at the end of each month. 

3.2.3.2.  Cash and cash equivalents 

The  Fund  defines  cash  equivalents  as  current  accounts  or  short-term  deposits  with 
original maturities of three months or less. 

3.2.3.3.  Short-term investments 

The  bond  portfolio,  seen  as  a  short-term  investment  portfolio,  is  made  up  of  euro-
denominated securities. These securities are classified as available for sale (AFS) in 
accordance  with  the  accounting  rules  adopted  by  the  Accounting  Officer  of  the 
European  Commission  and,  consequently,  are  recorded  at  their  fair  value  through 
equity. Unrealised gains or losses are reported in reserves until such security is sold, 
collected or otherwise disposed of or until such security is determined to be impaired. 
Impairment  losses  identified  are  recognised  in  the  economic  outturn  account  for  the 
year. 

On disposal of an available for sale security, the accumulated unrealised gain or loss 
included in equity is transferred to the economic outturn account for the year. Interest 
income on available for sale securities is included in ‘interest income’. 

The fair values of available for sale investments are generally determined from quoted 
market rates on active markets. 

These securities are initially measured at their acquisition cost, being their fair value 
at that time. The difference between the entry price and the redemption value, i.e. the 
premium/discount  spread,  is  amortised  over  the  remaining  life  of  each  of  the 

EN 

23 

   EN

 
securities  using  the  effective  interest  rate  method,  as  specified  under  accounting 
rule 11. 

If, in a subsequent period, the fair value of a debt instrument classified as available for 
sale increases and the increase can be objectively related to an event occurring after 
the impairment loss was recognised in the economic outturn account, the impairment 
loss  will  be  reversed  and  the  amount  of  the  reversal  will  be  recognised  in  the 
economic outturn account. 

Securities  are  considered  impaired  if  there  is  objective  evidence  of  impairment  as  a 
result of one or more events that occurred after the initial recognition of the security 
(a ‘loss event’) and that loss event has an impact on the estimated future cash flows 
from the security that can be reliably estimated. 

Evidence of impairment mainly consists of significant financial difficulties on the part 
of  the  issuer,  a  breach  of  contract,  restructuring  of  the  debt  of  the  issuer,  a  high 
probability  of  bankruptcy,  etc.  It  must  be  stressed  that  disappearance  of  an  active 
market because an entity’s financial instruments are no longer publicly traded is not 
evidence  of  impairment.  A  downgrade  of  an  entity’s  credit  rating  is  not,  in  itself, 
evidence of impairment, although it may be evidence of impairment when considered 
with other available information. A decline in the fair value of a financial asset below 
its cost or amortised cost is not necessarily evidence of impairment. 

If, in a subsequent period, the fair value of a debt instrument classified as available for 
sale increases and the increase can be objectively related to an event occurring after 
the impairment loss was recognised in the economic outturn account, the impairment 
loss  will  be  reversed  and  the  amount  of  the  reversal  will  be  recognised  in  the 
economic outturn account. 

3.2.3.4.  Contributions 

Contributions received from the European Commission or paid back to the European 
Commission  are  recognised  in  the  balance  sheet  on  the  date  when  payments  are 
received or made. 

3.2.3.5.  Securities lending activity 

In April 2008 the Fund entered into an automatic securities lending programme with 
Euroclear Bank SA/NV to lend assets from its available for sale bond portfolio. 

lent  within 

Securities 
lending  programme  are  not 
derecognised from the Fund’s balance sheet as control over the contractual rights that 
these securities confer is still held by the Fund itself. 

the  automatic  securities 

Income from securities  lending activity is recorded in the economic outturn account 
on an accrual basis. 

3.2.3.6.  Taxation 

The Protocol on the Privileges and Immunities of the European Union, appended to 
the Treaty of 8 April 1965 establishing a Single Council and a Single Commission of 

EN 

24 

   EN

 
the  European  Communities,  stipulates  that  the  assets,  revenue  and  other  property  of 
the institutions of the Union are exempt from all direct taxes. 

3.3. 

Financial risk management 

3.3.1. 

Interest rate and liquidity risks 

•  Interest rate risk position 

Theoretically, hedging instruments could be used to manage the interest rate (market) 
risk. However, as agreed between the Commission and the EIB, no significant risk is 
currently taken and therefore hedging is not performed. 

As the transactions and operations are denominated in euro only, no other hedging is 
required. 

The  distribution  of  the  Fund’s  holdings  on  31  December  2009  (excluding  accrued 
interest) is indicated in the table below: 

Fixed-rate investments 

Segments 

Less than 3 
months 
EUR 

3 months to 
1 year  
EUR 

1 to 10 years
EUR 

TOTAL 

EUR 

Floating 
rate bonds 
EUR 

Current 
accounts 

Other cash 
equivalents 
— at cost 

Short-term 
deposits — 
nominal 

AFS 
portfolio — 
at fair value 

1 078 498.12 

0.00

0.00

0.00 

1 078 498.12

36 554 203.91 

0.00

0.00

0.00 

36 554 203.91

153 300 000.00 

0.00

0.00

0.00 

153 300 000.00

15 164 224.80  73 514 480.00

901 281 274.08

39 255 400.00  1 029 215 378.88

TOTAL 

206 096 926.83  73 514 480.00

901 281 274.08

39 255 400.00  1 220 148 080.91

Percentage 

16.88 % 

6.03 %

73.87 %

3.22 % 

100.00 %

On  31  December  2009,  the  interest  rate  range  for  the  cash  and  cash  equivalents 
(fixed-term  deposits)  was  between  0.45 %  and  0.74 %  (2008:  between  3.10 %  and 
5.15 %).  

The effective interest rate range for the available for sale (AFS) securities portfolio is 
between 2.11 % and 5.52 % (2008: between 2.94 % and 5.52 %). 

EN 

25 

   EN

 
  
  
The  distribution  of  the  Fund’s  holdings  on  31  December  2008  (excluding  accrued 
interest) is indicated in the table below: 

Fixed-rate investments 

Segments 

Less than 3 
months 
EUR 

3 months to 
1 year 
EUR 

1 to 10 years
EUR 

Floating rate 
bonds EUR 

TOTAL 

EUR 

Current 
accounts 

Other cash 
equivalents 
— at cost 

Short-term 
deposits — 
nominal 

AFS 
portfolio — 
at fair value 

1 209 530.44 

0.00

0.00

0.00

1 209 530.44

19 842 008.01 

0.00

0.00

0.00

19 842 008.01

182 557 991.00 

0.00

0.00

0.00

182 557 991.00

15 568 198.70  58 890 040.00

746 075 069.78

47 635 037.00

868 168 345.48

TOTAL 

219 177 728.15  58 890 040.00

746 075 069.78

47 635 037.00

1 071 777 874.93

Percentage 

20.45 % 

5.49 %

69.61 %

4.45 %

100.00 %

EN 

26 

   EN

 
  
  
•  Liquidity position 

The  table  below  provides  an  analysis  of  assets,  liabilities  and  equity  into  relevant 
maturity groupings based on the remaining period from the balance sheet date to the 
contractual  maturity  date.  It  is  based  on  the  most  prudent  assumptions  on  maturity 
dates. Therefore, in the case of liabilities the earliest possible repayment date is shown 
and for assets the latest possible repayment date. 

Assets  and  liabilities  that  have  no  contractual  maturity  date  are  grouped  together  in 
the ‘Maturity undefined’ category. 

Maturity 

Less than 3 
months 

3 months to 1 
year 

1 to 10 years 

Maturity 
undefined 

TOTAL 

Assets in 

Current 
receivables 

Current 
accounts 

Short-term 
deposits 

of which: 
accrued 

Other cash 
equivalents 

of which: 
accrued 

AFS 
portfolio 

of which: 
accrued 

3 626.09 

1 078 498.12 

153 413 282.91 

113 282.91 

36 589 034.32 

34 830.41 

0.00 

0.00 

0.00 

0.00 

0.00 

0.00 

0.00 

0.00 

0.00 

0.00 

0.00 

0.00 

0.00 

3 626.09 

0.00 

1 078 498.12 

0.00 

153 413 282.91 

0.00 

113 282.91 

0.00 

36 589 034.32 

0.00 

34 830.41 

22 772 460.25 

86 104 184.86 

940 536 674.08 

0.00  1 049 413 319.19 

7 608 235.45 

12 589 704.86 

0.00 

0.00 

20 197 940.31 

Total 

213 856 901.69 

86 104 184.86

940 536 674.08

0.00  1 240 497 760.63

EN 

27 

   EN

 
 
  
  
  
  
  
Equity and liabilities in EUR 

Equity 

Accounts 
payable 

Total 

Net 
liquidity 
position on 
31.12.2009 

Cumulative 
liquidity 
position on 
31.12.2009 

Net 
liquidity 
position on 
31.12.2008 

Cumulative 
liquidity 
position on 
31.12.2008 

0.00 

717 539.60 

717 539.60 

0.00

0.00

0.00

0.00

1 239 780 221.03 

1 239 780 221.03

0.00

0.00 

717 539.60

0.00

1 239 780 221.03 

1 240 497 760.63

213 139 362.09 

86 104 184.86

940 536 674.08

(1 239 780 221.03) 

0.00

213 139 362.09 

299 243 546.95

1 239 780 221.03

0.00 

225 250 984.27 

81 719 321.55

783 787 106.78

(1 090 757 412.60) 

0.00

225 250 984.27 

306 970 305.82

1 090 757 412.60

0.00 

3.3.2. 

Credit risk 

•  Fixed-term deposits — Profile of counterparties 

In  accordance  with  the  agreement  between  the  Community  and  the  EIB  on  the 
management  of  the  Guarantee  Fund,  all  interbank  investments  should  have  a 
minimum issuer short-term rating from Moody’s or equivalent of P-1. The following 
table shows the ratings of the interbank investments on 31 December 2009, including 
accrued interest. 

Long-
term 
rating  

Short-
term 
rating  

31.12.2009 

EUR 

31.12.2008 

EUR 

Aa1 

Aa2 

Aa3 

A1 

A2 

P-1 

P-1 

P-1 

P-1 

P-1 

0.00

0.00 %

54 525 499.55 

20 007 916.67

93 487 631.85

18 913 641.39

21 004 093.00

13.04 %

60.94 %

12.33 %

13.69 %

58 424 545.44 

70 480 508.50 

0.00 

0.00 

29.73 %

31.85 %

38.42 %

0.00 %

0.00 %

Total 

153 413 282.91

100.00 % 183 430 553.49 

100.00 %

•  Other cash equivalents — profile of counterparties 

EN 

28 

   EN

 
  
  
  
  
  
  
  
  
 
  
  
 
  
  
 
  
  
  
  
On 31 December 2009, the Fund had investments in four short-term discount papers. 
The issuer profile, including accrued interest, is as follows: 

Long-term rating  

Short-term 
rating  

31.12.2009 

EUR 

31.12.2008 

EUR 

Aaa 

Aa1 

Aa2 

Aa3 

A1 

A2 

P-1 

P-1 

P-1 

P-1 

P-1 

P-1 

10 493 735.01

0.00

0.00

28.68 %

0.00 %

0.00 

0.00 

0.00 %

0.00 %

0.00 % 19 857 333.59 

100.00 %

7 998 681.86

18 096 617.45

0.00

21.86 %

49.46 %

0.00 %

0.00 

0.00 

0.00 

0.00 %

0.00 %

0.00 %

Total 

36 589 034.32

100.00 % 19 857 333.59 

100.00 %

•  Available for sale portfolio — Profile of issuers 

All  the  securities  held  in  the  portfolio  are  in  line  with  the  revised  management 
guidelines and meet the following criteria: 

–  Securities issued or guaranteed by Member States: minimum rating Baa3;  

–  Securities issued by a supranational institution, other States or  public  companies: 

minimum rating Aa2;  

–  Covered bonds: rating Aaa;  

–  Securities issued by banks and corporations: minimum rating Aa2.  

EN 

29 

   EN

 
  
  
 
 
  
 
  
  
 
 
  
 
  
On 31 December 2009, the profile of the available for sale portfolio of issuers and the 
market value excluding accrued interest were as follows: 

Issuer 

31.12.2009 

EUR 

31.12.2008 

EUR 

BANKS Aaa 

5 248 441.50 

0.51 %

70 988 004.75 

8.18 %

MEMBER STATE Aaa 

345 569 222.84

33.58 %

249 412 037.16 

MEMBER STATE Aa1 

37 671 628.40

3.66 %

42 717 052.70 

MEMBER STATE Aa2 

126 846 827.20

12.32 %

136 457 798.10 

MEMBER STATE A1 

27 683 049.00

MEMBER STATE A2 

91 259 008.94

MEMBER STATE A3 

0.00

26 120 568.10

2.69 %

8.87 %

0.00 %

2.54 %

81 631 320.77 

31 768 236.10 

8 841 921.00 

0.00 

28.73 %

4.92 %

15.72 %

9.40 %

3.66 %

1.02 %

0.00 %

MEMBER STATE 
Baa1 

PUBLIC COMPANY 
Aaa 

PUBLIC COMPANY 
Aa1 

CORPORATE Aaa 

216 311 016.20

21.02 %

89 834 136.85 

10.35 %

CORPORATE Aa1 

4 947 500.00

0.00

0.00

0.00 %

10 517 400.00 

0.00 %

0.48 %

4 456 000.00 

0.00 

1.21 %

0.51 %

0.00 %

COVERED BOND Aaa 

147 558 116.70

14.34 %

141 544 438.05 

16.30 %

Total 

1 029 215 378.88

100.00 %

868 168 345.48 

100.00 %

EN 

30 

   EN

 
  
  
 
 
  
 
 
  
 
 
  
 
3.4. 

Short-term investments — Available for sale assets 

The following tables show the situation of the available for sale assets: 

Amount on 1 January 2008 

Acquisitions 

Disposals and withdrawals (original acquisition cost) 

Change in carrying amount — actuarial difference 

Change in accrued interest 

Revaluation surplus/(deficit) fair value adjustment transfer to equity 

Amount on 31 December 2008 

Amount on 1 January 2009 

Acquisitions 

Disposals and withdrawals (original acquisition cost) 

Change in carrying amount — actuarial difference 

Change in accrued interest 

Revaluation surplus/(deficit) fair value adjustment transfer to equity 

Amount on 31 December 2009 

EUR 

903 713 224.50

147 585 260.00

(183 814 230.00)

5 294 965.48

(1 234 864.72)

15 405 312.14

886 949 667.40

EUR 

886 949 667.40

228 822 855.00

(81 328 791.00)

(2 463 198.22)

1 416 618.39

16 016 167.62

1 049 413 319.19

On  31  December  2009,  the  nominal  value  of  the  investment  portfolio  was 
EUR 1 003.9 million, against a market value of EUR 1 029.2 million, without accrued 
interest. 

Accrued 
EUR 18 781 321.92) breaks down as follows: 

interest 

totalling  EUR 20 197 940.31  on  31  December  2009  (2008: 

•  Fixed-rate notes  EUR 20 161 491.94 (2008: EUR 18 461 427.08); 

•  Floating rate notes EUR 36 448.37 (2008: EUR 319 894.84). 

On 31 December 2009 the market value of securities lent under the automatic security 
lending 
totalled 
EUR 30 316 307.73 (2008: EUR 3 492 077.83). 

agreement  with  Euroclear 

excluding 

accrued 

interest 

EN 

31 

   EN

 
  
 
  
3.5. 

Cash and cash equivalents 

The following table shows the split of cash and cash equivalents (amounts including 
accrued interest): 

Description 

31.12.2009 

31.12.2008 

EUR 

EUR  

Unrestricted cash 

Current accounts 

Short-term deposits 

1 078 498.12  

1 209 530.44 

153 413 282.91 

183 430 553.49

Other cash equivalents — Discount papers 

36 589 034.32 

19 857 633.59

Total 

191 080 815.35 

204 497 717.52

3.6. 

Contributions 

Contributions  are  increased  by  contributions  received  from  the  budget  of  the 
European Union and by recovery of previous payments made by the Fund with regard 
to  defaulted  guaranteed  loans.  Contributions  are  either  decreased  by  repayments 
requested  by  the  European  Commission  or  by  payments  the  Fund  is  making  with 
regard  to  defaulted  guaranteed  loans.  These  cash  movements  are  recognised  in  the 
balance sheet on the date when payments are received or made. 

During the 2009 financial year the Fund received one contribution from the European 
Commission totalling EUR 91 960 000.00. By comparison, in the 2008 financial year 
the Fund had to repay EUR 125 750 000.00 to the European Commission. 

3.7. 

Current liabilities 

Description 

31.12.2009 
EUR 

31.12.2008 
EUR 

Accounts payable 

Management fees 

Audit fees 

Total 

687 539.60 

30 000.00 

717 539.60 

658 322.32

31 650.00

689 972.32

Management fees are payable to the EIB on an annual basis. They are calculated as a 
percentage  per  annum  of  the  average  of  the  Fund’s  assets.  This  percentage  is  a 
declining rate depending on the Fund’s assets. 

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3.8. 

Financial operations revenue 

Description 

Total amount, thereof: 

Interest income, thereof:  

Interest income on cash and  

cash equivalents 

2009 

EUR 

2008 

EUR 

41 753 692.10 

48 802 560.79

41 676 644.38 

47 665 167.17

3 496 637.06 

8 043 015.28

Interest income on available for sale portfolio 

38 180 007.32 

39 622 151.89

Other financial income, thereof:  

Realised  gain  on  sale  of  available  for  sale 

portfolio  

77 047.72 

0.00 

1 137 393.62

1 085 236.81

Income from securities lending activity 

77 047.72 

52 156.81

3.9. 

Financial operations expenses 

Description 

Total amount, thereof: 

Management fees 

Bank fees 

Audit fees 

3.10. 

Subsequent events 

2009 

EUR 

2008 

EUR 

(803 818.74) 

(784 325.01)

(687 539.60) 

(658 322.32)

(86 279.14) 

(30 000.00) 

(94 352.69)

(31 650.00)

There  have  been  no  material  post-balance  sheet  events  which  would  require 
disclosure or adjustment to the 31 December 2009 financial statements. 

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