Wholesale Banking Conducts global wholesale banking operations. The primary focus is on the Netherlands and Belgium, where we offer a full range of products to companies and other institutions. Elsewhere we take a more selective approach with regard to our clients and products. Wholesale Banking also manages ING Real Estate, the world’s largest real estate investment manager based on the value of its assets under management.
On 25 April 2006, the AGM approved the buyback of (depositary receipts for) preference A shares from Aegon, as announced on 21 March 2006. It also authorised the purchase of (depositary receipts for) preference A shares in the company’s own capital at more fl exible levels, and the cancellation of all preference A shares purchased by ING Groep N.V.
Second, the Group offers risk diversifi cation as we manage risk at the global level across banking and insurance. Increased risk diversifi cation brings capital benefi ts because a lower requirement for risk-based solvency capital translates into a higher return on equity. On top of that ING centralised its capital management in 2006 in order to better balance the requirements of shareholders, rating agencies and regulators. Centralised risk management and centralised capital management is essential for allocating capital across ING on the basis of economic profi t criteria. This allows for greater strategic fl exibility and provides the freedom to invest capital in places where it generates the highest return.
Returns Margins remained strong as ING focuses on balancing growth and returns to maximise value creation. Continued attention for capital allocation and pricing discipline led to a further increase in returns at the banking operations. The underlying after-tax Risk-Adjusted Return On Capital improved to 20.4% from 19.1%, driven by a strong improvement at Wholesale Banking. Underlying economic capital increased by EUR 1.0 billion to EUR 15.9 billion due to model refi nements as well as continued growth at ING Direct and Retail Banking. The internal rate of return on new life insurance sales improved slightly to 13.3%.
Operating expenses from the insurance operations increased 2.0% to EUR 5,275 million. Recurring expenses increased with 6.1% to EUR 5,252 million, as the non-recurring part of the expenses was much higher in 2005 (IT expenses, reorganisation costs, SOX implementation and other projects). The recurring expense growth was mainly caused by costs to support the ongoing growth of the business, particularly in Asia.
The overall market risk position of ING Bank can be characterised by: – a sound liquidity profi le since a large liquidity buffer is maintained against unexpected negative market developments; – a modest trading risk profi le compared with total earnings and capitalisation; – longer term investment of savings and demand deposit money taking into account client behaviour and the interest rate nature of this money; – signifi cant sensitivity to EUR and USD interest rate changes due to the strategic interest rate mismatch in the non-trading book and basis risk in our retail banking activities.
Trading risk For our trading activities our primary market risk measure is Valueat -Risk (VaR) on which limits are based. VaR quantifi es, with a onesided confi dence level of at least 99%, the maximum overnight loss that could occur due to changes in risk factors if positions remain unchanged for one day. Average consolidated VaR for ING Wholesale Banking was EUR 31 million (2005: EUR 28 million).
Non-trading risk ING Bank has a signifi cant sensitivity to EUR and USD interest rate changes. This is a result of both the strategic interest rate risk mismatch in its non-trading books and the basis risk – the imperfect correlation in the adjustment of rates earned and paid – in our retail banking activities. To measure interest rate risk, ING Bank applies Earnings-at-Risk (EaR), Net Present Value at Risk (NPV) and VaR.
Operational risk arises from direct or indirect loss resulting from inadequate or failed internal processes, people and systems or from external events. ING has developed a sophisticated model which calculates the required operational risk capital for ING Bank and ING Insurance.
With continued profi t growth in 2006, driven by the Netherlands and Central Europe, Insurance Europe remains a solid profi t contributor to ING Group. In the Netherlands, effi ciency programmes are progressing, while customer satisfaction ratings improved again. Robust sales of singlepremium products led to strong value creation in Central Europe. Meanwhile, Insurance Europe continues to invest in growth through product development and the setting up of new greenfi eld operations.
Improved effi ciency was another priority in 2006. Almost all data centres within Central Europe have been consolidated in Katowice, Poland, and several projects were undertaken to start standardising work processes and systems. In Bulgaria, a new life company was launched, based on the experience of its sister company ING Hungary, supplying expertise in fi elds such as product development, distribution, systems and administrative support.
In 2006, Wholesale Banking continued its efforts to strengthen client relationships, contain costs and optimise capital allocation, helping increase returns in a highly competitive market. The focus has been on delivering profi table growth from value-added businesses such as Structured Finance, Financial Markets, Leasing and Factoring, Payments and Cash Management, as well as ING Real Estate, while limiting the growth of risk-weighted assets, particularly General Lending, where margins are under pressure.
Intensifying client relationships 2006 saw further developments in the shift to the new client coverage model, launched two years ago. The focus has been on solution selling, i.e. structured fi nance and other high value products. Improved ratings in annual client satisfaction surveys show that the change in emphasis has been well received by clients.
• Focus on simplicity, customer centricity and cost leadership pays off • Meeting customers’ needs with new products and services • ING Private Banking builds on success, especially in Belgium and Asia • Compliance organisation is strengthened
Assets under management increased 16.8% to EUR 59.2 billion, while profi t before tax grew by 15.8% to EUR 242 million. The strong growth in 2006 came mainly from Belgium and Asia. According to a recent survey of private banking by McKinsey, between 2003 and 2005 the Belgian private-banking market grew strongly, compared to the rest of Europe. In Belgium, ING Private Banking assets increased by EUR 1.5 billion to EUR 13.0 billion. In Asia, assets increased by EUR 2.0 billion to EUR 10.1 billion.
With just a few products in a limited range of product categories, ING Direct sells large volumes of each, which creates operational effi ciency and profi tability. In addition to the focused product range, the low cost base is maintained by the use of standardised, state-of-the art IT systems and the absence of a branch network.
Successful launches The Diversifi ed International Fund, which was launched in the US utilising ING IM’s global investment and asset-allocation capabilities, had solid fi rst year sales of EUR 214 million. The senior bank loan sales include EUR 0.9 billion from three Collateralized Loan Obligation (CLO) transactions launched in 2006, demonstrating our commitment to providing structured solutions for clients. The ING Risk Managed Natural Resources Fund, a wellreceived closed-end fund, raised EUR 400 million from retail investors. This unique energy and materials fund was designed by ING IM to seek total return in the sector with reduced volatility and an attractive distribution yield.
In 2006, ING IM Europe made the most successful fund introduction in the Dutch market with the ING (L) Opportunity Obligatie Fonds of EUR 305 million. This introduction marked the strong distribution capabilities within our affi liated channels (ING Bank) and our successful strategic partnership with third-party distributors. In Asia, ING successfully launched the Asia High Dividend Fund as well as the China A-Share Fund with combined net infl ows of EUR 581 million.
Shared direction is about creating a common understanding among employees of ING’s objectives. Communication plays a major role here. During the year, major emphasis was placed on stepping up the dialogue with employees. A series of ‘town hall’ meetings were held between the chairman, business lines’ senior management and employees. To create an additional platform for dialogue with employees, a CEO site has been launched. The site explains ING’s key strategic objectives and has a Q&A forum where employees can ask questions. The most frequently asked questions were to do with strategy, HR policies and benefi ts and performance culture. The chairman also continued with his quarterly e-mails to all employees, covering ING’s results and specifi c issues. ING held another series of dialogue sessions between Executive Board members and a select group of global talent – individuals with high potential. Live ING, an interactive learning programme which explains the strategic priorities and organisational structure, continued and will be delivered at the local level in 2007: ING’s six business lines are now implementing Live ING within their induction programmes.
Diversity ING has a broad customer base worldwide. To understand their needs, we need to refl ect their diversity, as we believe that encouraging diversity is not only our social responsibility but also a long-term business advantage.
A special element of the art & culture programme is the ING Collection. In 2006, ING published a new catalogue, Art in the Offi ce, featuring a selection of the 20,000 works of art in the ING Collection, displayed in 1,200 offi ces worldwide. ING also feels it is important to show its social and cultural involvement through exhibitions in national and international museums. In 2006, we organised an international exhibition in Poland and plans for 2007 and 2008 include exhibitions in Belgium, the Netherlands, Italy, France and the Philippines.
Intention to abolish ING Trust Offi ce It is the intention of the Executive Board and the Supervisory Board to abolish the Trust Offi ce and depositary receipts once the number of votes on ordinary shares and depositary receipts of ordinary shares, including proxies at a General Meeting of Shareholders (GMS) is at least 35% of the total votes that may be cast for three consecutive years. In 2005, 26% of total votes were cast, which fi gure increased to 28% in 2006. The Executive Board is committed to achieving the 35% requirement and will encourage depositary receipt holders, particularly institutional investors, to participate in voting at the General Meeting of Shareholders.
Piet Klaver (Born 1945, Dutch nationality, male; appointed in 2006, term expires in 2010) Former chairman of the Executive Board of SHV Holdings N.V. Other business activities: Member of the Supervisory Board of SHV Holdings N.V. Member of the Supervisory Board of Jaarbeurs Holding B.V. Member of the Board of Stichting Maatschappij en Onderneming (SMO). Chairman of the African Parks Foundation. Chairman of the Utrecht School of the Arts.
The proposed appointment of Piet Hoogendoorn per 1 June 2007 is based on his broad international experience and knowledge of audit, tax, consultancy and fi nancial advisory services.
Report of the Executive Board on Internal Control Over Financial Reporting
– ING aims for total compensation at the median level in the relevant market, allowing only for above-median compensation in the event of outstanding performance
MICHEL TILMANT Number of options 132,163 108,200 82,600 Number of performance shares 27,650 19,300 15,000 Fair market value of long-term incentive (2) 1,734 1,160 661
ING depositary receipts for shares held by members of the Executive Board
Hans van der Noordaa 14,000 14,000 0 35.26 15 Mar 2006
ING depositary receipts for shares and options held by Supervisory Board members Supervisory Board members are permitted to hold ING depositary receipts for shares as a long-term investment. The table below shows the holdings by members of the Supervisory Board. Supervisory Board members did not hold ING options at year-end 2006, with the exception of Mr. Klaver as indicated in note 2 to the table.
Adequacy test The adequacy of the Provision for life insurance, net of unamortised interest rate rebates, DAC and VOBA, is evaluated regularly by each business unit. The test considers current estimates of all contractual and related cash fl ows, and future developments. It includes investment income on the same basis as it is included in the profi t and loss account.
Loans guaranteed by credit institutions 2,088 1,448 320 378 2,408 1,826
For the above associates in which the interest held is below 20%, signifi cant infl uence exists based on the combination of ING’s fi nancial interest for own risk and its role as investment manager.
Appraisal of property in own use during the last fi ve years by professionally qualifi ed valuers (in percentages)
Changes in the composition of the group –7 –8 –1 –12 –8 –20 Disposals –9 –8 –63 –41 –72 –49 Depreciation –177 –198 –222 –223 –399 –421 Impairments –1 –1 Exchange rate differences –6 12 –26 41 –32 53
Receivables on account of direct insurance from – policyholders 2,390 2,212
Ordinary shares All shares are in registered form. No share certifi cates have been issued. Shares may be transferred by means of a deed of transfer, subject to the approval of the Executive Board of ING Group. The par value of ordinary shares is EUR 0.24. The authorised ordinary share capital of ING Group consists of 3,000 million shares, of which as at 31 December 2006 2,205 million have been issued and fully paid.
The holder of a depository receipt is entitled to receive from the Trust Offi ce payment of dividends and distributions corresponding with the dividends and distributions received by the Trust Offi ce on a share of the relevant category.
A holder of depository receipts who does not attend the General Meeting of Shareholders in person or by proxy is entitled to give a binding voting instruction to the Trust Offi ce for a number of shares equal to the number of his depository receipts of the relevant category.
Depository receipts for ordinary shares held by ING Group As at 31 December 2006, 53.8 million (2005: 38.7 million) of depository receipts for ordinary shares ING Groep N.V. with a par value of EUR 0.24 was held by ING Group or its subsidiaries. These were purchased to hedge option rights granted to the Executive Board members and other employees.
In case of a restructuring of the share capital of ING Groep N.V or a merger of ING Group with any other company or a transfer of the assets of ING Group (or a substantial part thereof) to any other company, the exercise price of the B warrants will not be adjusted. In that event, a warrant holder will be entitled to obtain the securities of the kind and number a holder of ordinary shares would have been entitled to if the B warrants had been exchanged for ordinary shares immediately before that event.
This percentage is calculated by taking the arithmetic mean of the average effective yield on the 5 longest-dated Dutch government loans, as determined by a Calculating Agent to be designated by the Executive Board for the last 20 stock exchange days preceding the day on which the fi rst ‘A’ preference shares are issued, or, as the case may be, preceding the day on which the dividend percentage is adjusted. The percentage thus established may be increased or decreased by not more than 0.5 percentage points, depending on the market conditions then prevailing, as the Executive Board may decide with the approval of the Supervisory Board.
Notional amount in Interest Year of original rate issue Due date currency Balance sheet value 2006 2005
Claims incurred but not reported (IBNR) 1,148 1,831 112 1,148 1,943
As at 31 December 2006, the net receivables from reinsurers amounted to EUR 1,476 million (2005: EUR 719 million) after the provision for uncollectible reinsurance of EUR 6 million (2005: EUR 6 million).
Changes in the composition of the group –4 27 –27 –4 8,198 7,424 1,389 1,127 9,587 8,551
ING Group had an outstanding balance of EUR 66 million at 31 December 2006 (2005: EUR 68 million) relating to environmental and asbestos claims of the insurance operations. In establishing the liability for unpaid claims and claims adjustment expenses related to asbestos related illness and toxic waste clean up, the management of ING Group considers facts currently known and the current state of the law and coverage litigation. Liabilities are recognised for IBNR claims and for known claims (including the costs of related litigation) when suffi cient information has been developed to indicate the involvement of a specifi c insurance policy, and management can reasonably estimate its liability. In addition, liabilities are reviewed and updated regularly.
Target Weighted average expected allocation Percentage of plan assets long term rate of return 2007 2006 2005 2006 2005
Amount outstanding 31 December Average Interest Rate Repayments amounts in thousands of euros 2006 2005 2006 2005 2006 2005
Investment contracts for risk of company 7,505 7,223 7,505 7,223 Investment contracts for risk of policyholders 13,245 11,410 13,245 11,410 Amounts due to banks 121,680 122,064 120,839 122,234 Customer deposits and other funds on deposit 496,077 466,982 496,680 465,712 Financial liabilities at fair value through profit and loss
Additional information to the consolidated balance sheet of ING Group continued 34 REGULATORY REQUIREMENTS ING Bank Capital adequacy and the use of regulatory required capital are based on the guidelines developed by the Basel Committee on Banking Supervision (the Basel Committee) and European Union Directives, as implemented by the Dutch Central Bank (DNB) for supervisory purposes. The minimum Tier-1 ratio is 4% and the minimum total capital ratio (known as the ‘BIS ratio’) is 8% of all risk-weighted assets, including off-balance sheet items and market risk associated with trading portfolios.
Shareholders’ equity (parent) 38,266 36,736 Excluding: Revaluation reserves –3,066 –6,304 Preference shares 215 296 Preference shares issued by group companies 1,138 1,269 Goodwill –286 –173 Subordinated loans 6,253 6,318 Capital base ING Group 42,520 38,142
Income from investments in debt securities and loans 8,756 8,340 8,095 18 12 8,774 8,352 8,095
The majority of the risks involved in the security and currency trading is economically hedged with derivatives. The results on security trading is partly offset by results on these derivatives. The result of these derivatives is included in Other and amounts to EUR 1,662 million.
Distributions on account of interest or underwriting results 458 1,824 313 Bonuses added to policies 369 379 371 Deferred profit sharing expense –26 11 801 2,214 684
Expenditure from Life underwriting includes an amount of EUR 181 million in 2006 (2005: EUR 220 million; 2004: EUR 100 million) in relation to reserve strengthening for Insurance Asia/Pacifi c as further described under Segment reporting.
Property under development for third parties 19 19 Associates 3 3 Other intangible assets 10 21 10 21 31 103 22 –4 –27 27 76 22
Impairments on Loans and advances to customers are presented under Addition to loan loss provision. Impairments on Investments are presented under Investment income.
Cost incurred in 2005 to acquire property, equipment, and intangibles 1,081 142 46 214 236 103 8 1,830 1,830
Insurance Insurance Insurance Wholesale Retail ING 2004 Europe Americas Asia/Pacific Banking Banking Direct Other Total
Cost incurred in 2005 to acquire property, equipment, and intangibles 1,271 138 173 135 41 51 21 1,830
Income between geographical areas (2) –4 –2 –3 –86 –120 –134 –1,054 –756 –362 –1,144 –878 –499
2.1 Consolidated annual accounts 52 NET CASH FLOW FROM INVESTING ACTIVITIES Information on the impact of companies acquired or disposed of is presented in Note 28 Principal subsidiaries and companies acquired/disposed.
2. ING Group’s risk profi le is transparent, ’no surprises’, and consistent with delegated authorities. 3. Delegated authorities are consistent with the overall Group strategy and risk appetite. 4. Transparent communication to internal and external stakeholders on risk management and value creation.
RISK GOVERNANCE ING Group’s risk governance framework provides clear charters and mandates for the management of risk. At the highest level, there are Board committees which oversee risk taking and have ultimate approval authority. One level below, ING has several Group risk committees which focus on a specifi c type of risk and have an advisory role to the Executive Board. In 2006, ING introduced the ’three lines of defence’ concept described below.
– ING Group Credit Committee – Transaction Approval (GCCTA): Advises on transactions involving the taking of credit risk (including issuer investment risk). The GCCTA meets twice a week.
– Asset & Liability Committee ING Insurance (ALCO Insurance): Advises on all risks for ING’s Insurance activities. This includes volatility (affecting earnings and value), exposure (required capital and market risk) and insurance risks. ALCO Insurance meets six times a year.
The Group Risk Function is structured independently from the business lines and is organised through fi ve departments: – Corporate Credit Risk Management (CCRM) is responsible for the credit risk management of ING Bank and ING Insurance. – Corporate Market Risk Management (CMRM) is responsible for the market risk management of ING Bank. – Corporate Insurance Risk Management (CIRM) is responsible for the insurance and market risk management of ING Insurance. – Corporate Operational Information & Security Risk Management is responsible for managing operational, information, and security risks within ING Bank and ING Insurance.
– Corporate Compliance assists, supports and advises Management in fulfi lling its compliance responsibilities, advises employees on their (personal) compliance obligations and monitors the embedding of Compliance Policies in both ING Bank and ING Insurance.
Credit analysis is risk/reward-oriented in that the level of credit analysis is a function of the risk amount, tenor, structure (e.g. covers received) of the facility, and the risks entered into. ING Bank applies the Risk Adjusted Return on Capital framework (RAROC). This method consistently measures the performance of different activities and links to shareholder value creation. The use of RAROC increases focus on risks versus rewards in the decision making process, and consequently stimulates the use of scarce capital in the most effi cient way. More sophisticated RAROC-based tools are used internally to ensure a proper balance of risk and reward within the portfolio and concentration parameters. ING’s credit analysts make use of publicly available information in combination with in-house analysis based on information provided by the customer, peer group comparisons, industry comparisons and other quantitative techniques.
Note: the above captions are consistent with those used for internal risk management purposes and do not relate to fi nancial statement captions.
ING Direct has expanded its activities in Australia and Canada. Consequently, the Australian and Canadian dollar are added to the list of main currencies, as presented in the table for 2006 above.
The fi rst component is day-to-day funding, which constitutes a policy to suffi ciently spread the day-to-day funding requirements. The Treasury function monitors all maturing cash fl ows along with expected changes in core-business funding requirements. This includes replenishment of existing funds as they mature, expected withdrawals from retail current accounts, savings and additional borrowings. Furthermore, access to the capital markets is actively managed by regularly issuing public debt in all material markets and the maintenance of investor relations.
Risks from these products arise with respect to the adequacy of insurance premium rate levels and provisions for insurance liabilities and capital position as well as uncertainty of the future returns on investments of the insurance premiums. Risks are classifi ed as actuarial and underwriting, market risk, credit risk and operational risk.
The most signifi cant interest rate risk within ING’s insurance businesses exists in Taiwan where ING has material exposure to a sustained low interest rate environment. This is due to long term interest rate guarantees of 6–8% embedded in the life contracts sold by the business until 2001. Since 2002, ING has changed the design of its Taiwan life insurance products, strengthened reserves and increased the internal capital allocation for this business.
The scorecard consists of fi ve modules that supplement each other: The overall scorecard outcome showed good progress in 2006 in all business lines. During 2006, operational, information and security risk as well as compliance requirements were integrated in the scorecard.
Like many other large international fi nancial institutions, ING engages and in the past has engaged in a limited amount of business with counterparties, including government or government-related counterparties, in countries such as Cuba, Iran and Syria, countries which have been identifi ed as state sponsors of terrorism by the US State Department and subject to sanctions by various government agencies. ING does not believe that its revenues in such countries are or have been material to its overall business. In light of increased scrutiny of transactions involving such countries on the part of US and non-US regulatory authorities, investors and the media, as well as initiatives on the part of various institutions to adopt or enforce laws or regulations prohibiting transactions with or requiring divestment from entities doing business with such countries, ING is continuing to signifi cantly strengthen its compliance function generally, as ING has done in 2006.
Another initiative ING undertook during 2006 to increase compliance awareness was the allocation of 130 extra full-time equivalents (FTEs) employees to Compliance, increasing the number of dedicated compliance FTEs to around 700. As well Compliance and Operational Risk Management have an established governance structure in which the Audit Committee is informed regularly about any incidents with a major fi nancial and compliance impact. The incident reporting process provides information on fi nancial and compliance incidents on a timely basis. The Executive Board continued to emphasise the importance of compliance in internal conferences and interviews. Additional 2006 compliance initiatives included a mandatory compliance e-learning course for all Netherlands employees, regional compliance conferences and in the United States a Compliance Awareness Week program.
Michel J. Tilmant, Chairman Cees Maas, Vice-Chairman and CFO Eric F. Boyer de la Giroday Dick H. Harryvan Eli P. Leenaars Tom J. McInerney Hans van der Noordaa Jacques M. de Vaucleroy
The total amount of Equity in the parent company annual accounts equals Shareholders’ equity (parent) in the consolidated annual accounts. Certain components within equity are different, as a result of the following presentation differences between the parent company accounts and consolidated accounts: – Unrealised revaluations within consolidated group companies, presented in the Revaluation reserve in the consolidated accounts, are presented in the Reserve for associates in the parent company accounts; – Foreign currency translation on consolidated group companies, presented in the Currency translation reserve in the consolidated accounts, is presented in the Reserve for associates in the parent company accounts; – Revaluations on investment property recognised in income and consequently presented in Retained earnings in the consolidated accounts, is presented in the reserve for associates in the parent company accounts.
As a result, in the table provided on page 221 the 2006 and 2005 columns reconcile IFRS-EU (including IAS 32, IAS 39 and IFRS 4) to US GAAP. The 2004 columns reconcile IFRS-EU excluding IAS 32, IAS 39 and IFRS 4 to US GAAP. The application of IAS 32, IAS 39 and IFRS 4 as of 1 January 2005 results in certain cases in different reconciling items between IFRS-EU and US GAAP as compared to 2004. The notes to differences between IFRS-EU and US GAAP discussed below refer to IFRS-EU adopted as of 2005, unless specifi cally stated that the difference refers to 2004.
Loan loss provisioning Under IFRS-EU, loan loss provisions are determined under a revised methodology based on a narrow interpretation of an incurred loss model. The application of the IFRS-EU methodology has reduced the amount of the unallocated provision for loan losses that ING Group provided in prior years to adequately capture various subjective and judgmental aspects of credit risk assessment which were not considered on an individual basis. Accordingly, the alignment of US GAAP reporting with the change in estimation process on adoption of IFRS-EU in 2005 has resulted in a release of EUR 623 million (before tax) of the provision through the 2005 US GAAP profi t.
The Value of New Business was EUR 807 million in 2006, almost no change from 2005. Value of New Business continued to grow strongly in the developing markets of Insurance Asia/Pacifi c and Central Europe; combined their increase in VNB was 16.7%. Removing USFS Life insurance, the VNB in the US also continues to show strong growth, increasing by 15.8% from 2005. The developed markets of Belgium, the Netherlands, and Luxembourg combined for a 27.5% decline in VNB, from EUR 131 million in 2005 to EUR 95 million. The US Life insurance and Mexico business also showed large declines in the VNB. For US Life, EUR 1 million in 2005 VNB was reduced to EUR 53 million negative and Mexico’s VNB was reduced from EUR 21 million in 2005 to EUR 1 million in 2006. The VNB for South America increased from EUR 13 million in 2005 to EUR 21 million in 2006. During 2006 ING invested EUR 1,831 million to write new life insurance business. The overall rate of return expected on this investment is 13.3%. This compares to an overall return of 13.2% in 2005. The expected internal rate of return in developing markets is 17.7%.
(1) Countries classifi ed as developing markets are: – Central Europe: Bulgaria, Czech Republic, Hungary, Poland, Romania, Slovakia, Russia; – Americas: Chile, Mexico, Peru; – Asia/Pacifi c: China, Hong Kong, India, Korea, Malaysia, Taiwan, Thailand.
Credit ratings are indicators for the likelihood of timely and complete repayment of interest and instalment of fi xed-income securities as assigned by rating agencies.
DEFINED CONTRIBUTION PLAN Post-employment benefi t plans under which an enterprise pays fi xed contributions into a separate entity (a fund) and will have no legal or constructive obligation to pay further contributions if the fund does not hold suffi cient assets to pay all employee benefi ts relating to employee service in the current and prior periods.
OUT OF THE MONEY A call option is said to be out of the money if the exercise price is higher than the price of the underlying value; a put option is said to be out of the money if the exercise price is lower than the price of the underlying value.