Report and Accounts Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A.

Transcription

1 Report and Accounts 2010 Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A.

2 Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A. 1 TABLE OF CONTENTS Data on Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A. Members of the Company s Boards Management Report 1. Business Developed in Financial and Economic Condition 3. Proposal for the Allocation of Results 4. Closing Remarks Financial Statements Balance Sheet Income Statement Cash Flows Statement Statement of Changes in Equity Notes on the Financial Statements Certification of the Financial Statements Report of the Statutory Auditor

3 Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A. 2 DATA ON SOCIEDADE GESTORA DOS FUNDOS DE PENSÕES, S.A. The Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A. was incorporated on 3 June 1988 to manage the Banco de Portugal Pension Funds. The authorised and issued capital is 1,000,000 euros. Shareholders: The Banco de Portugal, with a shareholding corresponding to 98% as at 31 December 2010; and Members and beneficiaries of the Banco de Portugal Pension Fund Defined Benefit. Its registered office and services are located at Av. da República, No 57, 7 th floor, in Lisbon. As at 31 December 2010: The Company s Net Assets stood at 2,630, euros; The Company s Shareholders Equity amounted to 2,521, euros.

4 Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A. 3 SHAREHOLDERS MEETING Chairman Armando da Silva Couto Secretary Hernâni Fontoura Pires BOARD OF DIRECTORS Chairman António Manuel Martins Pereira Marta Director Vítor Manuel da Silva Rodrigues Pessoa Executive Director Helena Maria de Almeida Martins Adegas Statutory Audito Ernst & Young Audit & Associados S.R.O.C., S.A. Alternate Statutory Auditor Rui Abel Serra Martins, R.O.C.

5 Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A. 4 MANAGEMENT REPORT To the Shareholders, Pursuant to the law and the articles of association, the Board of Directors hereby submits the 2010 Report and Accounts and other documents concerning the 2010 financial year for your appraisal. 1. BUSINESS DEVELOPED IN 2010 The Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A. is the entity responsible for managing the Pension Funds of the Banco de Portugal, as well as for preparing the actuarial valuations to compute the value of liabilities related to the benefit scheme and other commitments financed by the Defined Benefit Pension Fund. The Banco de Portugal holds 97.8% of the Sociedade Gestora s equity and its staff is mainly composed of employees of Banco de Portugal on secondment. In 2010, it was particularly important the setting up of a new Defined Contribution Pension Fund, which emerged as a result of the alterations to the general Social Security Scheme applicable to bank employees, as well as to the Company-Level Agreements (Acordos de Empresa) of the Banco de Portugal, published on 22 June 2009 in the Work and Labour Bulletin (Boletim de Trabalho e Emprego). The new Banco de Portugal Defined Contribution Pension Fund covers the employees of Banco de Portugal who started working in the banking sector after 3 March 2009 and who are covered by the general Social Security Scheme, by virtue of Degree Law No 54/2009 of 2 March. This Fund is financed by contributions made by both the Banco de Portugal and the employees. Adherence to the Fund is considered to be an option for the employee and mandatory to the Banco de Portugal, given the employee s choice to join.

6 Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A. 5 The new Pension Fund s main feature is to allow each participant to associate the risk profile of the investment policy to their own life cycle. The Fund has been active since the end of 2010, after authorization from the Instituto de Seguros de Portugal (The Portuguese Insurance and Pension Funds Supervisory Authority) being granted. During 2010, the project to implement the Regulatory Standard No 8/2009-R of 4 June of the Instituto de Seguros de Portugal on risk management and internal control was pursued. In this context, a review of the organisational structure of the Sociedade Gestora dos Fundos de Pensões was also proceeded, particularly through the development of the internal audit and compliance function, as well as through the formalisation of the risk management and internal control function. Within this scope, the assessment project for the internal control system, which aims to assess, implement and establish controlling procedures for the different risks incurred by the Sociedade Gestora dos Fundos de Pensões was further developed. As a result of another legislative change, which also had an impact on the activity undertaken by the Sociedade Gestora, the preparatory steps were taken for the integration in the general Social Security Scheme of the employees covered by the substitutive social security scheme, provided for in the regulatory acts of the collective labour agreement for the banking sector, and who were active staff on the publication date of Decree-Law No 1-A/2011. This legislative change will imply the future sharing of the liabilities relating to pension payments by statutory retirement age between both this Pension Fund and the Social Security. Regarding the investment on the systems and information technology, a new technological infrastructure project supporting the Fund s activity was implemented. This project emerged from the recommendations issued within the scope of the Business Continuity Plan with particular emphasis on the modernisation of the security systems and the redundancy implementation in critical components.

7 Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A. 6 It was also of significant importance the joint implementation project with the Banco de Portugal of a software upgrade for the management of financial and real estate assets. The Sociedade Gestora dos Fundos de Pensões continued to cooperate with its peers of Portuguese-speaking countries, in order to develop pension funds for the employees of the respective Central Banks. Within this scope, the training programmes in the fields of accounting and actuarial calculation are particularly noteworthy. 2. FINANCIAL AND ECONOMIC CONDITION The operating of income, worth 3,572,780 Euros, decreased by 56,000 Euros (-1,57%) from 2009, chiefly due to the reduction in the management commission paid by the Sponsor. The reduction aforementioned, which was decided by the Board of the Sociedade Gestora, together with the added reduction of financial income and other income and gains, resulted in a decrease of the total income by 165,746 euros (-4.52%) compared to The total of costs and losses, before Corporate Income Tax (CIT), was kept virtually stable compared to 2009 (+0.02%). Resulting from the transition process of the Official Plan of Accounts (Plano Oficial de Contabilidade POC) to the new Accounting Standardization System (Sistema de Normalização Contabilística - SNC), the amount of -3, Euros was reported as Retained Earnings, mainly due to the assets derecognition. Net income and equity stood at 78, Euros and 2,521, euros, respectively. Thus, the solvency margin of the Sociedade Gestora, reached a coverage ratio of % at the end of the fiscal year.

8 Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A PROPOSAL FOR THE ALLOCATION OF RESULTS The net result of the Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A., for the fiscal year of 2010, reached 78, euros and is proposed to be allocated as follows: Legal reserve: 3, euros Other reserves: 74, euros We also propose to transfer to Other Reserves the negative retained earnings, to the amount of 3, euros, resulting from the adjustments of transition to the new accounting base.

9 Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A CLOSING REMARKS The Board of Directors would like to conclude the 2010 Report and Accounts by thanking all of those who contributed to the achieved results, being particularly worthy of mention: The Banco de Portugal, for its confidence and cooperation; The Instituto de Seguros de Portugal, for the way it monitored the business of the Sociedade Gestora dos Fundos de Pensões, S.A.; The employees of the Sociedade Gestora, for the effort and high level of professionalism shown in the performance of their duties. Lisbon, 28 February 2011 The Board of Directors António Manuel Martins Pereira Marta Chairman Vítor Manuel da Silva Rodrigues Pessoa Director Helena Maria de Almeida Martins Adegas Executive Director

10 Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A. 9 FINANCIAL STATEMENTS Balance Sheet Income Statement Cash Flows Statement Statement of changes in Equity Notes on the Financial Statements Certification of the Financial Statements Report of the Statutory Auditor

11 Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A. 10 BALANCE SHEET AS AT 31 DECEMBER 2011 EUR Notes 31 Dec Dec 09 ASSETS Non current assets Tangible fixed assets 4 258, , Intangible fixed assets 4 92, , Deffered income tax assets 8 1, , , , Current assets Other receivables 9 52, Deferrals 9 193, , Financial assets held for trading 5 1,832, ,825, Cash and bank deposits 6 198, , ,277, ,365, TOTAL ASSETS 2,630, ,699, SAREHOLDERS EQUITY AND LIABILITIES Equity Realised capital 7 1,000, ,000, Legal reserves 7 129, , Other reserves 7 1,317, ,114, Retained earnings 7 3, , Net profit (loss) 7 78, , Total equity 2,521, ,443, Liabilities Current liabilities Suppliers 9 64, , State and other public entities 8 25, , Other payables 9 8, , Deferrals 9 10, , , Total liabilities 108, , TOTAL SHAREHOLDERS EQUITY AND LIABILITIES 2,630, ,699, The Accountant Paulo José Antunes Jorge The Board of Directors António Manuel Martins Pereira Marta Vitor Manuel da Silva Rodrigues Pessoa Helena Maria de Almeida Martins Adegas

12 Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A. 11 INCOME STATEMENT BY NATURE INCOME AND EXPENSES Notes 31 Dec 10 EUR 31 Dec 09 Revenue 11 3,572, ,628, Administrative Expenses 12 1,169, ,107, Personnel costs 10 2,153, ,136, Provisions (increases/decreases) 15 35, Increases/decreases in fair value 14 3, Other income and gains 13 72, , Other expenses and losses 16 93, , Net Profit (Loss) before Depreciations, financial function and income tax 225, , Expenses/reversals in amortisation and depreciation 4 133, , Impairment on depreciable/amortisable investments (losses/reversals) Operating profit (loss) before financial function and income tax 91, , Interest and similar income received 17 19, , Interest and similar expenses paid Profit (loss) before income tax ,06 357, Income tax 33, , Net profit (loss) for the period 78, , The Accountant Paulo José Antunes Jorge The Board of Directors António Manuel Martins Pereira Marta Vitor Manuel da Silva Rodrigues Pessoa Helena Maria de Almeida Martins Adegas

13 Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A. 12 CASH FLOWS STATEMENT INCOME AND EXPENSES 31 Dec Dec 09 EUR Proceeds from clients 2,319, ,51 Payments to suppliers 1,036, ,75 Payments to personnel 1,007, ,80 Cash generated from operations 275, ,96 Payment/proceeds from Corporate Income Tax 57, ,27 Other proceeds/payments , ,13 Cash flows from operating activities (1) , ,56 CASH FLOWS FROM INVESTING ACTIVITIES Payments in respect of: Tangible fixed assets , ,94 Intangible assets , ,07 Financial investments , ,13 Proceeds from: Tangible fixed assets 39,98 Intangible assets Financial investments , ,79 Interest and similar income 1.049,80 884,41 Cash flows from investing activities (2) , ,96 CASH FLOWS FROM FINANCING ACTIVITIES Cash flows from financing activities (3) 0,00 0,00 Change in cash and cash equivalents (1+2+3) , ,60 Cash and cash equivalents at beginning of period , ,00 Cash and cash equivalents at end of period , ,60

14 Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A. 13 STATEMENT OF CHANGES IN THE SHAREHOLDERS EQUITY AS AT 31 DECEMBER 2009 EQUITY ASSIGNED TO SHAREHOLDERS EUR REALISED CAPITAL LEGAL RESERVES OTHER RESERVES RETAINED EARNINGS NET PROFIT/LOSS FOR THE PERIOD TOTAL TOTAL EQUITY AS AT 1 JANUARY ,000, , ,010, , ,233, ,233, CHANGES IN THE PERIOD New accounting principles first application 13, Translation differences of financial statements Revaluation surplus of tangible and intangible fixed assets 132, Revaluation surplus of tangible and intangible fixed assets and respective changes Deferred income tax adjustments 57, Other changes in equity , , , NET PROFIT/LOSS FOR THE PERIOD 3 271, , , COMPREHENSIVE RESULT 4= , , SHAREHOLDERS EQUITY MOVEMENTS IN THE PERIOD Allocations 5, , , Other operations , , , AS AT 31 DECEMBER = ,000, , ,114, , , ,443, ,443,524.40

15 Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A. 14 STATEMENT OF CHANGES IN THE SHAREHOLDERS EQUITY AS AT 31 DECEMBER 2010 EQUITY ASSIGNED TO SHAREHOLDERS EUR REALISED CAPITAL LEGAL RESERVES OTHER RESERVES RETAINED EARNINGS NET PROFIT/LOSS FOR THE PERIOD TOTAL TOTAL EQUITY AS AT 1 JANUARY ,000, , ,114, , , ,443, ,443, CHANGES IN THE PERIOD New accounting principles first application Revaluation surplus of tangible and intangible fixed assets Revaluation surplus of tangible and intangible fixed assets and respective changes Deferred income tax adjustments Other changes in equity NET PROFIT/LOSS FOR THE PERIOD 8 78, , , COMPREHENSIVE RESULT 9=7+8 78, , SHAREHOLDERS EQUITY MOVEMENTS IN THE PERIOD Allocations 10, , , , Other operations , , , , AS AT 31 DECEMBER ,000, , ,317, , , ,521, ,521,662.23

16 Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A. 15 PRESENTATION The Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. was incorporated on 3 June 1988 through a notary deed entered on folio 74 to folio 76 of deed book No C of the 9 th Lisbon Notary Office, and its corporate object is to administer, manage and represent the Banco de Portugal Pension Funds. Its incorporation was authorised by Executive Order No 245/88 of 20 April of the Ministry of Finance. In 2010, the company name was altered to Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A.. Note 1 BASIS OF PREPARATION After Decree-Law No 158/2009 of 13 July having entered into force on 1 January 2010, the Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A. was complied to adopt the standards listed in the Accounting Standardization System (SNC), which is based on the International Accounting Standards, published by IASB (International Accounting Standards Board) and adopted by the European Union. The financial statements were prepared for the first time in 2010 in accordance with the Accounting Standards and the Financial Report (NCRF) approved by the Administration Board on 31 January The financial statements had been approved and published according to the provisions of the Official Accounting Plan until 31 December However, so as to meet adequate comparability standards, these financial statements were subject to adjustment, in order to conform to the SNC.

17 Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A. 16 The adjustments of transition report back to 1 January 2010 and were made in accordance with the provisions of IFRS 1 The first adoption of the International Financial Reporting Standards. The disclosures established by the Standard aforementioned, with regard to the transition of the accounting standards in force in Portugal to the Financial Report (CNRF) will be disclosed in Note 18. The main accounting policies used in the preparation of the financial statements were the following: Intangible Assets Intangible assets consist mainly of application software. These are initially valued at their acquisition cost and include all costs incurred in implementing the software for internal use. Subsequently, adjustments are made to meet the accumulated depreciation. These costs are amortized, on a straight line basis, over the estimated useful life of the assets, which does not exceed 3 years regarding computer applications (33.33% rate). Tangible Fixed Assets Tangible fixed assets are valued at their cost value less depreciation. These costs are amortized on a straight-line basis over the expected useful life of each underlying asset, as shown in the following table: Annual percentage Basic equipment 10.00% Office equipment: office, furniture, fittings and social 10 to 33.33% Other tangible assets 10.00%

18 Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A. 17 Any gains and losses arising from write-offs or disposals are determined by the difference between the amounts actually received and the book value of the asset. These are recorded in the financial statements as income or expense. Financial assets held for trading These assets are acquired principally for both the purpose of selling in the short-term and for the purpose of generating a profit, whether based on income, or on fluctuation in price. The purchase and sales of financial assets are recorded at the time of transaction and are immediately recognised at fair value. The gains and losses, whether realised or not, arising from changes in the fair value, are included in the financial statement in the period in which they arise, under either profit or loss accounts. The fair value of investments is calculated on current bid prices. As for listed securities, whose quotes significantly deviate from the fair value, this is established by using appropriate valuation techniques regarding each type of financial asset. Hence, to obtain fair values, it is taken into consideration the recent transaction price of similar assets, carried out by unrelated parties, as well as valuation techniques such as discounted cash-flow analysis. The valuation of listed securities with low liquidity in regulated markets and chiefly traded over the counter is determined by using prices made available by the main providers of financial information. Interests and charges are recorded in their specific accounts upon establishment of receipt or payment, save for dividends, which are recorded upon receipt.

19 Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A. 18 Recognition of income and costs In accordance with the accrual principle, income and costs are recognised according to the duration of the operations, i.e., they are recorded as they arise, without taking into account the time in which they are received or paid. Income is only recognised if the future economic benefits associated to each transaction are likely to flow to the Sociedade Gestora, and when the revenue can be reliably measured. Income tax Income tax is calculated on a taxable result basis, in accordance with deferred taxes. Deferred tax assets are recognised only to the extent of the probable existence of sufficient expected future taxable income to absorb the deductible temporary differences. Deferred tax assets are recalculated on an annual basis and adjusted to meet the expectable usage value in accordance with the provisions laid down in the corporate income tax code applicable to the period in which deferred tax assets are realised. Note 2 ASSUMPTIONS, JUDJEMENTS AND ESTIMATES USED IN THE PREPARATION OF THE FINANCIAL STATEMENTS In the preparation of the current financial statements, we elaborated estimates and adopted assumptions, which affect the accounting value of the assets, liabilities, revenues and expenses, as well as contingent liabilities, if applicable. The elaborated assumptions and estimates were based on the information available until the approval date of the accounts given by the Administration Board on 28 February 2010.

20 Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A. 19 Note 3 FINANCIAL RISK MANAGEMENT The Sociedade Gestora is subject to several financial risks, namely, market risk (exchange and interest rate), credit and liquidity risk: i) Exchange rate risk, given the lack of assets denominated in foreign currency, results from the acquisition of goods and services in currencies other than the Euro, thus, there being no need for coverage negotiation; ii) Interest rate risk arises from financial investments, at a fixed or variable rate, which are managed so as to ensure adequate liquidity and a low counterparty risk; iii) Credit risk, given the nature of the activity pursued by the Sociedade Gestora, is ensured by the existence of contractual agreements with the main shareholder; iv) Liquidity risk is prudently managed by maintaining sufficient cash and cash equivalents available for the pursue of the activity, as well as by trading financial investments in the short-term.

21 Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A. 20 Note 4 MOVEMENTS IN FIXED ASSETS Movements in fixed assets, including depreciation, were as follows: EUR Opening Balance Increases Write offs Closing Balance INVESTMENTS TANGIBLE FIXED ASSETS Basic equipment 270, , , , Office equipment 734, , , , Other tangible assets 73, , ,079, , , , INTANGIBLE FIXED ASSETS Development projects 117, , Computer software 1,591, , , , ,708, , ,002, , ,787, , ,242, ,699, DEPRECIATION TANGIBLE FIXED ASSETS Basic equipment 186, , , , Office equipment 614, , , , Other tangible assets ,97 6, , , , , , INTANGIBLE FIXED ASSETS Development projects 117, , Computer software 1,490, , , , ,607, , ,002, , ,451, , ,235, ,348, , , , , Note 5 MARKETABLE SECURITIES At the end of the year, the securities portfolio is broken down as follows: FINANCIAL INSTRUMENTS HELD FOR TRADING Currency Amount Average cost 31 Dec 10 Capital gains/ losses Accrued interest Book value EUR 31 Dec 09 Book value Treasury bills EUR 1,552, ,540, , ,544, , Treasury bonds EUR 280, , , , , ,021, Total 1,832, ,828, , , ,832, ,825,485.92

22 Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A. 21 Note 6 - CASH AND CASH EQUIVALENTS This heading is broken down as follows: EUR 31 Dec Dec 09 Demand deposits 197, , Term deposits , , , The amount of 1, Euros regarding the cash fixed fund should be added to the amounts aforementioned. Note 7 SHARE CAPITAL, RESERVES AND RETAINED EARNINGS The equity of the Sociedade Gestora is fully paid up and is represented by 200,000 shares with a nominal value of 5 euros each. The list of shareholders, as set forth in No 4 of Decree 448 of the code of Commercial Companies, as at 31 December 2010, is as follows: Holder Shares % Banco de Portugal 195, % The changes in the shareholders equity structure are recorded on the Statement of Changes in the Shareholders Equity.

23 Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A. 22 Resulting from the transition process of the Official Plan of Accounts to the new Accounting Standardization System, the amount of -3, euros was recorded under Retained Earnings, mainly due to the derecognition of assets. Note 8 - STATE AND OTHER PUBLIC ENTITIES The detailed balances in this section of the balance sheet, on 31 December 2009 and 2010, are as follows: EUR 31 Dec Dec 09 STATE AND OTHER PUBLIC ENTITIES Corporate Income Tax payable 1, , Retained taxes 1, Value Added Tax 20, Contributions to the Social Security , , Under current legislation, the Sociedade Gestora is subject to Corporate Income Tax and is not only framed as having Management Funds Activities, but also subject to the general scheme of income taxation. Hence on the profit earned in each tax period, a nominal tax rate of 25% is charged. Additionally, in each tax period, 1.5% of income from the Corporate Municipal Tax is charged on the taxable income not exempt from Corporate Income Tax.

24 Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A. 23 Tax returns of the Sociedade Gestora can be reviewed and corrected by the tax authorities, for a four-year period, with the exception of the Social Security statements, which may be reviewed for a five-year period, in both cases, with the exceptions foreseen by Law. In late 2010, this exceptions were not applicable to the Sociedade Gestora, namely due to the absence of tax losses or tax benefits, or due to the fact that there were no tax audits in progress, complaints or fiscal challenges that, depending on the case, may extend or suspend the aforementioned time-limit. The tax authorities may still make corrections whenever special agreements, on different terms from those that would normally be agreed with independent entities, have been established. During the fiscal year of 2010, the tax authorities conducted an internal audit, regarding the 2008 fiscal year, from which no adjustments to the taxable base or to the missing tax determination took place. The board of the Sociedade Gestora believes that any adjustments resulting from tax reviews, applicable to the exercises subject to revision, should not have any significant impact on the financial statements presented. The Sociedade Gestora recognises the tax effects of the temporary differences between the accounting and tax result, for purposes of taxation on Corporate Income Tax regarding the depreciation of the securities portfolio. Deferred income taxes represent the recoverable and payable tax value in the foreseeable future resulting from temporary differences. Deferred taxes are calculated and evaluated annually by using the current effective tax rate when the temporary differences reverse.

25 Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A. 24 In the transition to the Accounting Standardization System, the deferred income taxes associated to the transition adjustments were recognised, as well as deferred taxes on assets and liabilities not recognised in accordance with the rules of the Official Plan of Accounts. The amount recorded in Deferred Taxes was of 1, euros. Note 9 SUPPLIERS, DEFERRALS AND OTHER RECEIVABLE AND PAYABLE VALUES This heading is broken down as follows: EUR 31 Dec Dec 09 Suppliers 64, , Deferred taxes 1, , Deferred assets 193, , Deferred liabilities 10, The amount regarding the item Suppliers records the movements of current accounts. On 31 December 2010, the value recorded on deferred assets highlights in particular the monthly payments incurred for services regarding Information Systems. It should also be mentioned that the amount of 7, euros for costs incurred for audit services is included in deferred liabilities.

26 Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A. 25 The recorded amount of 8, euros, on the same date, corresponds mostly to legal services rendered in 2010, which were paid in early The receivable amount of 52, euros related to the Banco de Portugal employees on secondment was recorded in late 2010 and represents a value to be settled by the Banco de Portugal in Nota 10 PERSONNEL COSTS This heading is broken down as follows: EUR 31 Dec Dec 09 Personnel salaries 2,118, ,074, Charges with salaries 6, , Other costs 29, , ,153, ,136, The item Personnel salaries corresponds to the amounts reimbursed to the Banco de Portugal on the charges paid to the employees of the Sociedade Gestora, who are employees of the Banco de Portugal on secondment. Other costs include mostly the training costs incurred by the Sociedade Gestora.

27 Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A. 26 Note 11 REVENUES Revenues exclusively concern the management commission, whose value is set on an annual basis in accordance with the management agreement entered into by and between the Banco de Portugal and the Sociedade Gestora. Following a resolution by the Board of Directors of the Sociedade Gestora, the management fees for 2010 were set at 3,572,780 euros. Note 12 ADMINISTRATIVE EXPENSES At the end of the fiscal years of 2009 and 2010, this heading is as follows: EUR 31 Dec Dec 09 ADMINISTRATIVE EXPENSES Specialised services 693, , Materials 5, , Enery and fluids 21, , Travel, accommodation and transport 18, , Sundry services 430, , ,169, ,107,985.74

28 Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A. 27 Note 13 OTHER INCOME AND GAINS Other Income and gains, on 31 December 2009 and 2010, were as follows: EUR 31 Dec Dec 09 OTHER INCOME AND GAINS Corrections to preceding years , Income and gains in disposals 5, , Excess of estimated taxes 1, Additional income 11, , Other 53, , , , Note 14 INCREASES AND DECREASES IN FAIR VALUE The losses and gains resulting from fair value of the financial instruments held for trading are as follows: EUR 31 Dec Dec 09 INCREASES AND DECREASES IN FAIR VALUE Losses due to decreases in fair value 7.314, ,04 Gains due to increases in fair value 3.335, , , ,37

29 Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A. 28 Note 15 PROVISIONS At the end of 2010 there were no movements made in provisions. EUR 31 Dec Dec 09 REVERSALS OF PROVISONS Current Law Suits , , Note 16 OTHER EXPENSES AND LOSSES This heading is broken down as follows: EUR 31 Dec Dec 09 OTHER EXPENSES AND LOSSES Indirect taxes 60, , Fees 11, , Expenses and losses in disposals 6, , Corrections to preceding years 3, , Contributions 8, , Fees and other financial expenses 2, , , ,511.64

30 Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A. 29 Nota 17 INTEREST AND INCOME RECEIVED AND INTEREST AND EXPENSES PAID At the end of the fiscal years of 2009 and 2010, this heading is as follows: EUR 31 Dec Dec 09 INTEREST AND INCOME RECEIVED Interest received from deposits 2, , Interest received from investments 17, , , , SIMILAR INTEREST AND EXPENSES Interest on arrears and compensatory Others , ,569.28

31 Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A. 30 Note 18 TRANSITION ADJUSTMENTS The main adjustments made following the transition of the Official Plan of Accounts to the new Accounting Standardization System are as follows: EUR Retained Earnings Net Profit/Loss Deferred Income Taxes Tangible Fixed Assets Accumulated Depreciation Restructuring Provision Financial Instruments held for Trading Derecognition of assets recorded in POC in tangible and intangible assets Cancellation on 01/01/2009 of fixed assets , , ,39 Establishment of deferred income tax , ,62 Derecognition of depreciation , ,64 Reversal of deferred tax by applying the effective tax rate , ,43 Securities Fair Value Adjustments in the portfolio fair value , ,63 Recognition of deferred tax by applying the effective tax rate 3.546, ,93 Recognition of the securities fair value Negotiable on 31/12/ , ,67 Recognition of deferred tax regarding the fair value of securities in ,82 703,82 Derecognitionof gains and losses realised in financial investments , ,63 Reversal of deferred tax inherent in fair value of securities on their disposal 3.465, ,00 Cancellation of the Restructuring Provision Cancellation of provision , ,00 Establishment of deferred tax regarding provision 8.750, ,00 Derecognition of the cancellation of the restructuring provision made in , ,00 Reversal of deferred tax regarding the restructuringprovision 8.750, ,00 Note 19 - REMUNERATION OF THE MANAGEMENT AND SUPERVISORY BOARD In compliance with Article 3 of Law No 28/2009 of 19 June, it should be highlighted that members of the Board of Directors of the Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A. did not receive any remuneration in 2010.

32 Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A. 31 The supervisory board of the Sociedade Gestora, consisting of a Statutory Auditor, represented by Ernst & Young Audit & Associados, SROC, S.A. received a fee amounting to 15,246 euros, with reference to Note 20 SUSPENSE ACCOUNTS In accordance with the Standards of the Instituto de Seguros de Portugal, the accounts of the Banco de Portugal Pension Funds, managed by the Sociedade Gestora, are recorded under the following off-balance sheet accounts: 01 Banco de Portugal Pension Funds 02 Management of the Banco de Portugal Pension Funds As at 31 December 2010, these accounts were balanced and amounted to 1,235,684, euros, corresponding to the net assets of the two Pension Funds under management.

33 Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A. 32 CERTIFICATION OF THE FINANCIAL STATEMENTS

34 Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A. 33 ERNST & YOUNG Ernst & Young Audit & Associados SROC, S.A. Avenida da República, 90, 6 th floor Lisbon Portugal Tel: Fax: Introduction Legal Certification of Accounts 1. We have audited the attached financial statements of Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, which comprise the Balance Sheet as at 31 December 2010 (which shows total assets of 2,630, Euros and total shareholders equity of 2,521, Euros, including net profits of 78, Euros), the Income Statement by Nature, the Statement of Changes in Equity and the Cash Flows Statement for the year then ended, as well as the corresponding Notes. Responsibilities 2. The Board of Directors is responsible for preparing financial statements, which give a true and fair view of the financial condition of the Managing Company, the results of its operations, the changes in its equity and cash flows, as well as for adopting appropriate accounting policies and criteria and maintaining an appropriate internal control system. 3. We are responsible for expressing an independent and professional opinion on the basis of our audit of the aforementioned financial statements. Scope 4. We conducted our audit in accordance with the Standards and Technical Recommendations issued by the Institute of Statutory Auditors, which require that we plan and execute with a view to obtaining reasonable assurance whether the financial statements are free from material misstatement. Accordingly, the aforementioned audit included: Limited liability company * Share capital 1,105,000 euros * Registered in the Statutory Auditors Association under no. 178 * Registered in the CMVM under no * Taxpayer no * Registered in the Lisbon Commercial Registry under the same number * A member of Ernst & Young Global Limited

35 Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A. 34 examination, on a test basis, of documentation supporting the amounts and disclosures in the financial statements and an evaluation of the estimates, based on the judgements and criteria defined by the Board of Directors, used in the preparation of the financial statements; an assessment as to whether the accounting policies and the disclosures adopted are appropriate, as applicable; assessing that the accounts were prepared on a going-concern basis; and an overall assessment of the appropriateness of the financial statements. 5. Our audit also covered the verification that the financial information included in the Management Report is consistent with the financial statements. 6. We believe that the audit carried out provides a reasonable basis for expressing our audit opinion. Opinion 7. In our opinion, the aforementioned financial statements present fairly, in all material respects, the financial position of Sociedade Gestora dos Fundos de Pensões do Banco de Portugal as at 31 December 2010, the results of its operations and the changes in its equity and cash flows for the financial year then ended, in accordance with accounting principles generally accepted in Portugal. Report on other legal requirements 8. It is also our opinion that the financial information included in the Management Report is consistent with the financial statements for the year. Lisbon, 12 March 2010 Ernst & Young Audit & Associados SROC, S.A. Firm of Statutory Auditors (no. 178) Represented by: [signature] Ana Rosa Ribeiro Salcedas Montes Pinto (ROC no. 1230)

36 Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A. 35 REPORT OF THE STATUTORY AUDITOR

37 Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A. 36 ERNST & YOUNG Ernst & Young Audit & Associados SROC, S.A. Avenida da República, 90, 6 th floor Lisbon Portugal Report of the Statutory Auditor Tel: Fax: To the Shareholders In compliance with the provisions of sub-paragraph g) of article 420 of the Código das Sociedades Comerciais (the Portuguese Companies Act), we issue the annual report on our auditing activities and give our opinion on the Management Report, the Financial Statements and the proposal on the distribution of results presented by the Board of Directors of the Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, relating to the financial year ending on 31 December During the financial year of 2010, we monitored the Company s activities and did the following: Verified, to the extent deemed appropriate, the accounting records and supporting documents; Verified, when appropriate and to the way and extent deemed appropriate, the existence of goods or valuables belonging to the Sociedade Gestora, or received by way of guarantee, deposit or other; Verified the accuracy of the documents for rendering of accounts; Verified that the accounting policies and the valuation criteria, which include those arising from the first application of the Accounting Standardization System, approved by Decree-Law No 158/2009 of 13 July, lead to a correct assessment of the assets and earnings; Assessed the efficacy of the risk management, internal monitoring and internal audit systems; Limited liability company * Share capital 1,105,000 euros * Registered in the Statutory Auditors Association under no. 178 * Registered in the CMVM under no * Taxpayer no * Registered in the Lisbon Commercial Registry under the same number * A member of Ernst & Young Global Limited

38 Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A. 37 Showed availability to receive reports of irregularities from the shareholders, the employees and other (if any); Confirmed that the Management Report, the Balance Sheet, the Income Statement by Nature, the Statement of Comprehensive Income, the Statement of Changes in Equity, the Cash Flows Statement and Notes, are in accordance with the applicable laws and regulations and reflect the position of the accounting records at the end of the year; Ensured compliance with the law and the articles of association; Fulfilled the duties required by the law and the articles of association. During our auditing activities we counted on the evidence and clarification, which we felt to be necessary, of the Board of Directors and the Company s services. Within the scope of the work done for Statutory purposes, we have issued, on the date hereof, the corresponding unqualified Legal Certification of Accounts. In the light of what has been said, we are of the opinion that: Opinion of the Statutory Auditor To the shareholders, We have inspected Sociedade Gestora dos Fundos de Pensões do Banco de Portugal under the provisions of article 420 of Código das Sociedades Comerciais (The Commercial Companies Act) and we declare that: a) The proposal for the distribution of results contained in the Management Report for the year 2010 is in accordance with the requirements regarding the constitution of the legal reserve and with the limits of profit distribution to the members, foreseen in the Commercial Companies Act. b) The Management Report for the financial year 2010 complies with the requirements foreseen in the Commercial Companies Act.

39 Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A. 38 c) The balance-sheet, the Income Statement by Nature, the Statement of Comprehensive Income, the Statement of Changes to Equity and the Cash Flows Statement and the corresponding Notes for the year 2010, meet the applicable legal and accounting requirements. Lisbon, 12 March 2010 The Single Supervisor Ernst & Young Audit & Associados SROC, S.A. Firm of Statutory Auditors (no. 178) Represented by: [signature] Ana Rosa Ribeiro Salcedas Montes Pinto (ROC no. 1230)