Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 1
2008
Report and Accounts
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 2
Table of Contents
Data on Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
Members of the Company’s Boards
Management Report
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
Balance Sheet and Income Statement
Notes to the Balance Sheet and Income Statement
Legal Certification of the Accounts
Opinion of the Single Supervisor
Banco de Portugal Pension Fund
Statement of Assets and Liabilities and Income and Expenditure Statement
Notes to the Statement of Assets and Liabilities and Income and Expenditure Statement
Certification of the Accounts
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Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 3
Data on Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. (SGFPBP) was
incorporated on 3 June 1988 to manage the Banco de Portugal Pension Fund.
The Company’s share capital is 1,000,000 euros.
Shareholders:
• Banco de Portugal, with a shareholding corresponding to 98% as at 31 December
2008; and
•
Members and beneficiaries of the Banco de Portugal Pension Fund.
Its registered office is at Rua do Comércio, no. 148, in Lisbon.
It has offices at Av. da República, no. 57, 7th floor, in Lisbon.
As at 31 December 2008:
• The Company’s Net Assets stood at 2,522,020 euros;
• The Company’s Shareholders’ Equity amounted to 2,233,396 euros;
• The value of the Pension Fund closed at 1,161,307,823 euros; and
• The total liabilities of the Pension Fund amounted to 1,159,582,431 euros.
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Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 4
Members of the Company’s Boards
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
Managing Director
Helena Maria de Almeida Martins Adegas
Single Supervisor
Ernst & Young Audit & Associados – S.R.O.C., S.A.
Alternate Single Supervisor
Rui Abel Serra Martins, R.O.C.
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Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 5
Management Report
To the Shareholders
Pursuant to the law and the articles of association, the Board of Directors hereby submits the
2008 Report and Accounts and other documents concerning the 2008 financial year for your
appraisal.
1. FOREWORD
The Banco de Portugal Pension Fund is composed of an autonomous set of assets allocated
exclusively to meeting the liabilities endorsed by the Banco de Portugal in respect of payment of
retirement, disability and widower’s benefits, as well as payment of post-retirement charges
relating to contributions to the healthcare and welfare service. As at 31 December 2008, the
value of the Fund was 1,161.3 million euros.
The financial management of the Pension Fund is oriented towards the combination of two
goals: to contain the risk of reduction in the funded ratio, corresponding to the ratio between
the Fund’s assets and its liabilities, and to simultaneously maximise the profitability of its asset
portfolio. The first of these two goals was paramount in 2008, in a context of growing
disruption of the financial markets. Thus, the conservative approach of the investment policy
was enhanced, by approximating the Pension Fund’s asset portfolio structure to the liabilities
structure. For this purpose, the exposure to long-term inflation-linked Euro Zone government
bonds was increased to the detriment of the equity component.
The emphasis placed on “hedging” potential changes in liabilities means that their accurate
estimation is especially critical. Accordingly, particular attention is paid to the actuarial and
financial assumptions used, especially the future estimated cash flow discount method, longterm growth projections for wages and pensions and, lastly, the life expectancy prospects of the
population covered.
In this context, both the Fund’s assets and liabilities are valued at their fair market value, using a
discount rate for the liabilities calculated on the basis of the daily interest rates applicable to very
low-risk instruments for the relevant maturities. This methodology is grounded on the
assumption that the present value of the liabilities has to represent, at each point in time, the
capital that would have to be invested in low-risk investments to meet future payments. Thus,
the discount rate is determined on the basis of the average interest rates of inflation-linked Euro
Zone government bonds at year end for the various maturities existing in the market, taking into
account the maturity structure of the Pension Fund’s liabilities, adjusted by a spread that
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Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 6
represents the difference between the interest rates for sovereign debt and very low-risk interest
rates.
As a result of the significant decrease in Euro Zone public debt interest rates in 2008, stemming
from the combined impact of the slowdown in economic activity, disappearance of inflationary
pressures and a climate of strong aversion to credit risk and preference for sovereign debt, we
arrived at a discount rate of 4.8% at the end of 2008, which represents a decrease of 0.35
percentage points compared to the end of the preceding year.
Particular attention is also paid to the assumptions relating to the future growth in wages and
pensions, which are based on estimated inflation rates derived from inflation-linked securities.
The future growth in wages incorporates the expected career evolution of active employees. In
accordance with this method, we assumed that, in the medium and long term, the discount rate
for pensions and the rate of growth in wages will be 1.764% and 2.764%, respectively, which
represents in both cases 0.60 percentage points less than the assumptions used last year.
The greater decrease found in the inflation rate compared to the discount rate led to an increase
in the real interest rate, which adversely affected both liabilities (-0.5%) and the return on the
asset portfolio (-1.3%).
With regard to life expectancy, we seek to incorporate an as reliable as possible estimate in order
to avoid undervaluing the liabilities. In 2008, we continued to use the TV 88/90 mortality table,
already adopted in the preceding years, whose adherence to reality was supported by an
empirical study performed on the basis of the Pension Fund’s demographic data up to 2006.
In the context of the Pension Fund’s aforementioned investment policy, traditional return and
risk measures applied to the individual management of assets lose their significance and more
appropriate “Asset-liability” (A/L) indicators are adopted.
In 2008, the funded ratio of the Fund was 100.1% and the A/L return stood at -0.8% (the
return on assets was 0.8% less than the reduction in liabilities).
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Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 7
Table 1: Pension Fund - Highlights
31/12/2007
31/12/2008
Active employees
1,689
1,688
Retirees
1,728
1,739
486
504
Discount rate
5.15%
4.80%
Estimated long-term inflation rate
2.36%
1.76%
TV 88/90
TV 88/90
Population Data
Pensioners
Actuarial and Financial Assumptions
Mortality table
Assets (million € and %)
Bonds
946.3
80.0%
977.2
84.1%
Real estate
161.1
13.6%
173.8
15.0%
Equities
75.8
6.4%
10.3
0.9%
1,183.3
100.0%
1,161.3
100.0%
Total
Liabilities (million €)
1,175.3
1,159.6
100.7%
100.1%
A/L return
2.7%
-0.8%
A/L risk (1-month VaR, 95% confidence)
0.53%
0.80%
Coverage Ratio
Funded ratio
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2. BUSINESS PURSUED BY SGFPBP
Upon the worsening of the crisis that plagued international financial institutions, operational and
control procedures were tightened, notably those related to the settlement of transactions and
custody of securities, which made it possible to mitigate operational and counterparty risks in
financial transactions.
In this context, we reformulated the financial asset custody service by executing new
agreements, and we developed a series of operational procedures in another financial institution
that enable the implementation of an appropriate business continuity plan.
Still with regard to operational risk management and following the “Risk Assessment” project
developed internally, we decided to prepare a business continuity plan by resorting to specialist
external advisers. This plan will cover all areas impacting on operations.
We continued our strategy of recruiting employees with higher education, who represent
approximately three quarters of total employees, which provides us with a highly qualified
technical team.
During 2008, we employed 33 people on average, one less than in 2007, the majority being
female.
By financing master degrees and post-graduate studies, we continued our policy of technical and
scientific training in the main universities, which makes it possible to provide the Company with
a highly skilled team to manage the Pension Fund’s assets. An identical policy was followed in
respect of attendance of specialist training actions.
A strict management of funding costs made it possible to keep the management fee unchanged
compared to the preceding year, at 3,489 million euros, which represents 0.3% of assets under
management.
At year end, SGFPBP’s shareholders’ equity amounted to 2.2 million euros, as a result of the
appropriation to reserves of all the results made in the preceding year.
Both SGFPBP and the Pension Fund met all the applicable regulatory ratios, among which the
increase in the solvency margin to 121.62% (114.3% in 2007) should be highlighted.
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Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 9
3. MACROECONOMIC BACKGROUND AND MARKET DEVELOPMENTS
2008 was marked by the global crisis in the financial markets originated by the deepening of the
real estate crisis in the USA, which was already being felt since mid-2007. The disruptions
affected first the financial sector and subsequently the other industries around the world.
Economic growth slowed down dramatically. Although positive annual growth rates were still
achieved (an estimated 0.8% for the Euro Zone), several countries began to contract, particularly
during the last quarter of the year. The harmonised consumer price index in the Euro Zone grew
1.6% year-on-year in 2008, which corresponds to a sharp deceleration compared to 2007 and is
significantly lower than the target set by the ECB. The same scenario occurred in the USA, which
is estimated to have grown only 1.1% during 2008, while in Japan GDP fell by 0.6%. This
slowdown was reflected in a significant fall in consumer inflation in both countries, with 0.1%
year-on-year in the USA and 0.4% year-on-year in Japan.
The Portuguese economy was affected by these circumstances and it is estimated to have
experienced a zero growth rate, , given the contraction in economic activity witnessed in the
second half of the year, particularly in the last quarter. The recessionary environment was
reflected in a reduction in the year-on-year inflation to 0.8%, half the rate observed in the Euro
Zone.
With regard to the emerging economies, economic growth levels in China and India continue to
be high, albeit significantly lower than in the preceding years. It is estimated that the Chinese and
Indian economies grew 9.0% and 7.1%, respectively, in 2008.
Table 2: GDP and consumer price growth rates
Euro Zone
Portugal
USA
Japan
Gross Domestic Product (%)
2006
2007
2008e
2.9
2.6
0.8
1.4
1.9
0.0
2.8
2.0
1.1
2.0
2.4
-0.6
Consumer Prices (%)
2006
2007
2008
1.9
3.1
1.6
2.5
2.7
0.8
2.5
4.1
0.1
0.3
0.7
0.4
Sources: Eurostat, Bureau of Labour Statistics (USA), Department of Commerce (USA) and Ministry of
Internal Affairs (Japan)
(e) Estimates
The crisis of confidence caused financial institutions to be highly reluctant to grant interbank
loans to one another, which led to an unprecedented widening in spreads between interbank
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Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 10
money market rates and treasury bill yields. In the Euro Zone, the spread between the 3-month
Euribor and German treasury bills peaked at 330 basis points in October.
The consequent liquidity crisis revealed weaknesses in many institutions all over the world,
notably in respect of the quality of assets held, balance sheet leverage and ability to source funds.
Some institutions were liquidated, while others were acquired.
The intervention of Central Banks and Governments increased in terms of both diversity and
amount. The drastic cuts in reference rates, the injections of liquidity into the financial system,
the financial institutions capital purchase programmes, which led in some cases to their
nationalisation, and express guarantees for bond issued by financial institutions should be
highlighted.
The ECB maintained its main refinancing reference rate at 4% until June 2008, having then
increased it to 4.25% in July. This policy was abruptly reversed as a consequence of the financial
crisis deepening and the key ECB rate was successively cutfrom October onwards, ending at
2.5% at the end of 2008 and 2% at the beginning of 2009.
Public debt interest rates fell markedly, particularly during the second half of the year, as a result
of the combined effect of the slowdown in economic activity, disappearance of inflationary
pressures and a market sentiment characterized by a strong aversion to credit risk and
preference for sovereign debt.
Table 3: Euro Zone interest rates
ECB intervention rate
Main refinancing operations rate
Treasury bill yields
3-month
6-month
1-year
Treasury bond yields
2-year
10-year
30-year
Dec-07
Dec-08
Change (p.p.)
4.00%
2.50%
-1.50
3.95%
3.99%
4.03%
1.74%
1.79%
1.82%
-2.22
-2.21
-2.19
4.02%
4.35%
4.62%
1.76%
2.94%
3.53%
-2.26
-1.41
-1.09
(*)
(**)
Source: REUTERS
(*) French treasury bills
(**) German government bonds
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Chart 1: Euro Zone yield curve movement
4.50
3.50
Change in yield (%)
Interest rate (%)
4.00
3.00
2.50
2.00
1.50
1.00
0.50
0.00
0
2
4
6
8
10
12
14
16
18
20
22
24
26
28
30
Maturity (years)
Yield curve Dec 2007
Yield curve Dec 2008
In the private debt market, the increasing widening in spreads which had commenced in 2007
became more obvious. The Itraxx Europe 5-year index, which reflects the cost of hedging the
risk of default by issuers of 5-year bonds in euros, expanded from approximately 50 basis points
at the end of 2007 to some 175 basis points at the end of 2008.
On the Foreign exchange market, the euro appreciated against the dollar, to a maximum of 1.60
in April and July, followed by a devaluation, to a minimum of 1.25 in November. At the end of
2008, the euro partially recovered against the dollar, to levels around 1.40.
In this context, equity markets suffered major losses. The European DJ Eurostoxx 50 index fell
approximately 44.3%; the US S&P 500 decreased 38.5%; the Japanese Nikkei 225 lost 42.1%; and
the Portuguese PSI-20 index fell 51.3%.
The markets’ behaviour in 2008 was further characterised by the strong volatility of oil prices.
These rose dramatically up to mid-July, when they reached 145 dollars per barrel, and then fell
significantly in the second half of the year. At the end of 2008, a barrel of Brent was priced close
to 35 dollars, losing 62% against prices at the beginning of the year.
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4. PENSION PLANS
4.1. OVERVIEW
The Banco de Portugal ensures, through the Pension Fund, the right to retirement, disability and
widower’s benefits (including possible supplementary and death benefits), as well as payment of
post-retirement charges relating to contributions to the healthcare and welfare service (Serviço
de Assistência Médico-Social - SAMS).
Pensions paid by way of retirement and widower’s benefits result from the addition of the
amounts calculated on the basis of each component of pensionable wages, in compliance with
the applicable collective employment contract and the Bank’s internal regulations.
The Pension Plan encompasses four schemes relating to base wages and seniority and three
schemes relating to fringe benefits.
4.2. DEVELOPMENTS IN THE POPULATION COVERED BY THE PENSION
FUND
We would like to highlight the significant maturity of the population covered by the Banco de
Portugal Pension Fund, where the number of beneficiaries is greater than that of its active
members. As a consequence, re the liabilities associated with pensions which are already in
payment represent an important share of the total liabilities which, in fact, strongly restricts
theasset management approach..
Table 4: Population covered by the Pension Fund
Active
Retirees
Pensioners
Total
31-12-2006 31-12-2007
1,709
1,689
1,734
1,728
486
486
3,929
3,903
Ratio
1
Assets /Beneficiaries
1Members; 2Retirees
2
0.77
0.76
Change
2006/2007 31-12-2008
-20
1,688
-6
1,739
0
504
3,931
-26
Change
2007/2008
-1
11
18
28
0.75
and Pensioners.
On 31 December 2008, the Pension Fund covered 1,688 members (active employees), 1,739
retirees and 504 pensioners.
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4.3. DEVELOPMENTS IN BENEFITS/CHARGES AND CONTRIBUTIONS
Chart 2 shows the developments in the volume of benefits and charges paid by the Pension
Fund in the last 10 years.
In 2008, the amount of matured pensions reached 46.06 million euros, which represents an
increase of 4.04% compared to the preceding year.
Sums paid by way of redeemed capital reached 1.3 million euros in 2008, compared to 0.7
million euros in the preceding year, while sums paid by way of death benefits remained identical
to those paid in 2007 (0.3 million euros).
Charges borne by the Pension Fund in respect of contributions to the SAMS concerning
pensions paid amounted to 2.9 million euros in 2008, the same amount as in 2007.
Chart 2: Volume of benefits and charges borne by the Fund
(thousand euros)
60,000
50,000
40,000
30,000
20,000
10,000
0
1999
2000
Pensions
2001
2002
Redeemed capital
2003
2004
Death benefits
2005
2006
2007
2008
Contributions to the SAMS
In 2008, total contributions amounted to 44 million euros, including an extraordinary
contribution of 20 million euros.
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4.4. ACTUARIAL VALUATION
4.4.1. Actuarial and financial assumptions
The main actuarial and financial assumptions are those listed in this point.
Table 5: Assumptions resulting from the Plan
65 years
14
14
Normal retirement age
Number of monthly pension instalments
Number of monthly wage instalments
Table 6: Actuarial and financial assumptions
Funding
Discount rate
Growth rate – pensions
Growth rate – wages
Growth rate – wage tables
Growth rate – minimum monthly guaranteed wages
Minimum monthly guaranteed wages in the following year
Mortality table
Disability table
Turnover table
Percentage of married staff
Age difference between members and spouses
31-12-2007
5.153%
2.359%
3.359%
3.359%
2.359%
426 €
31-12-2008
4.800%
1.764%
2.764%
1.764%
1.764%
450 €
TV 88/90
1978 - S.O.A. Trans. Male (US)
T-1 Crocker Sarason (US)
80%
3 (male individuals being older)
These assumptions are occasionally adjusted in line with the specific characteristics of the
population groups.
The discount rate determined at the end of 2008 and used to calculate the liabilities as at 31
December was 4.8%. This corresponds to the average interest rate, on that day, of inflationlinked Euro Zone government bonds for the different maturities existing in the market, taking
into account the maturity structure of the Pension Fund’s liabilities.
As a result of the public debt market’s behaviour in 2008, discussed in point 3, the discount rate
fell by 0.35 percentage points compared to the end of the preceding year. The inflation rate,
calculated with reference to inflation-linked Euro Zone government bonds, fell more heavily,
0.60 percentage points. This resulted in an increase in the real discount rate.
In 2008, we continued to use the TV 88/90 mortality table, already adopted in preceding years,
whose correspondence to reality was confirmed by an empirical study performed on the basis of
the Pension Fund’s demographic data up to 2006.
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The actuarial and financial assumptions used in the Minimum Solvency scenario determined by
the Instituto de Seguros de Portugal (the regulatory and supervisory body) are the following:
Table 7: Actuarial and financial assumptions
Discount rate
Growth rate – pensions
Growth rate - wages
Minimum guaranteed wages in the following year
Mortality table
Disability table
Turnover table
Percentage of married staff
Age difference between members and spouses
Minimum Solvency
31-12-2008
31-12-2007
4.500%
4.500%
1.764%
2.359%
0.000%
0.000%
450 €
426 €
TV 73/77
1978 - S.O.A. Trans. Male (US)
-/80%
3 (male individuals being older)
4.4.2. Actuarial valuation results
As at 31 December 2008, total liabilities for past services amounted to 1,159.6 million euros, of
which 663.9 million corresponds to liabilities for pensions payable and 495.6 million to liabilities
for past services of active employees.
Table 8: Liabilities for past services
Retirees and pensioners
Active employees
31-12-2007
31-12-2008
1,175,298,862
665,387,253
509,911,609
1,159,582,431
663,943,290
495,639,141
(euros)
In 2008, liabilities for past services decreased by 15.7 million euros.
This reduction corresponds to an overall annual decrease of -1.34% in the amount of liabilities
for past service, as a result of the following combined effects:
• Annual expected (normal) increase of 2.36% in liabilities; and
• Unforeseen annual decrease of -3.69% in liabilities, corresponding to an actuarial
departure (resulting from the difference between long-term assumptions and the actual
figures) and a financial departure resulting from the assumptions being marked to
market.
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5.
PORTFOLIO STRUCTURE AND RISK MANAGEMENT
The Pension Fund’s investment policy is defined within the applicable regulatory provisions
issued by the Instituto de Seguros de Portugal (ISP), notably in respect of the breakdown of its
assets and the use of derivatives, repos and securities lending transactions, and within more
restrictive internal provisions laid down by SGFPBP itself pursuant to the risk profile approved
by the Banco de Portugal.
Over 2008, the portfolio structure was continuously analysed and monitored with a view to the
identification of the degree of exposure to different types of risks and the corresponding way to
mitigate them, which was achieved by determining limits and resorting to hedging instruments.
Given the marked financial instability environment, risk management and risk control
procedures were adjusted and the restrictiveness of the investment guidelines was enhanced.
5.1. Strategic benchmark for 2008
For the dual purpose of limiting the risk of a reduction in the funded ratio and maximising the
return on the portfolio a strategic benchmark was selected for the Pension Fund’s
portfolioin2008. Its breakdown, which is summarily presented, conforms to the established risk
profile laid down by the Banco de Portugal.
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Chart 3: 2008 Strategic Benchmark: average annual breakdown
Bonds
81%
Equities
5%
Real estate
14%
USA
38%
Inflation linked
Governments
94%
Fixed income
Governments
3%
UK
9%
Asia
Pacific
5% Switzerland
5%
Euro
Zone
43%
Geographic breakdown of the equity component
Other
Alocação da componente obrigacionista
3%
Breakdown of the bond component
Funds
58%
Buildings
42%
Breakdown of the real estate component
5.2. Portfolio Breakdown by asset class
The portfolio breakdown by asset class was determined with reference to the breakdown of the
strategic benchmark. Some departures were assumed in order to incorporate short-term
expectations concerning market developments.
Over 2008, the portfolio exposure to equities was significantly reduced leading to an increase in
the exposure to bonds.
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Accordingly, in 2008 the average exposure to bonds reached 83% (almost entirely public debt),
while real estate and equities represented 14% and 3%, respectively.
The small equities component of the portfolio was predominantly exposed to the Euro Zone
(50%) and the USA (33%).
Chart 4: Portfolio breakdown by asset class: annual average breakdown
Bonds
83%
Real estate
14%
Equities
3%
Asia
Pacific
Inflation linkedGovernments
95%
4%
USA
Fixed income
Switzerland
4%
33%
Governments
3%
Other
2%
UK
Euro
Zone
50%
9%
Geographic breakdown of the equity component
Breakdown of the bond component
Buildings
Funds
42%
58%
Breakdown of the real estate component
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5.3. “Surplus-at-risk”
The risk of a funded ratio decline is assessed and monitored by calculating the 1-month Valueat-Risk for a 95% confidence level.
Chart 5: 1-month ”surplus-at-risk”
1.40%
1.20%
1.00%
0.80%
0.60%
0.40%
0.20%
0.00%
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
This risk measure, whose developments in 2008 are shown in Chart 5, corresponds to the
reduction in the funded ratio, at each point in time, in percentage points, which has an
associated estimated probability of 5% of being exceeded over a 1-month period.
The evolution of the Value-at-Risk during 2008 reflected, on the one hand, tactical adjustments
made to the investment portfolio and, on the other hand, the instability of the financial markets
associated with the marked deterioration in the economic sentiment.
5.4. Leverage-adjusted modified duration gap
The funded ratio sensitivity to changes in real interest rates is assessed and monitored by
calculating the leverage-adjusted modified duration gap.
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Table 9: Leverage-adjusted modified duration gap
Average 2008 values
a)
Modified duration of liabilities for past services
13.9
b)
Modified duration of bonds
15.7
c)
Weight of bonds
82.6%
d)
Funded ratio
100.1%
Leverage-adjusted modified duration gap
=b)xc)-a)/d)
-0.8
The negative differential experienced in 2008 indicates that the value of the asset portfolio is less
sensitive to changes in interest rates than the value of liabilities. Given that real interest rates
rose in 2008, this position positively contributed to the asset-liability return.
Given the high modified duration of the Pension Fund’s liabilities (13.9) and the fact that the
investment policy also includes low interest rate-sensitive assets, the average leverage-adjusted
modified duration differential registered in 2008 was achieved by holding a bond portfolio with
a high modified duration (15.7).
5.5. Bond portfolio breakdown by issuer type
The credit risk control is ensured by restricting investments to instruments and institutions of
reputed soundness and financial integrity, as well as by monitoring the ratings assigned by
international agencies, supplemented by market information analysis
The bond portfolio was mainly composed of inflation-linked securities denoting areal interest
rate-sensitivity similar to the one of the liabilities assumed by the Pension Fund. In this way, we
seek to mitigate the risk of funded ratio decline resulting from a possible increase in the inflation
rate.
Bearing in mind that liquid inflation-linked securities are almost exclusively public debt, this
represented virtually all the bond portfolio in 2008 (98.3%), the remainder being invested in
bonds issued by supranational institutions and financial institutions guaranteed by the
Portuguese Government.
In addition to this strategic motive, the crisis in the credit markets felt throughout the year also
contributed to the concentration of the portfolio on public debt.
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Table 10: Fixed income portfolio exposure by type
Governments
Average 2008 values (%)
Supranational
98.3%
0.6%
Financial Inst.
1.2%
5.6. Bond portfolio breakdown by rating
The credit risk of the Pension Fund’s fixed income portfolio was very limited throughout the
year, given the predominant exposure to high quality sovereign issuers
Chart 6: Bond portfolio breakdown by rating
(average 2008 values)
20%
51%
29%
AAA
AA
A
5.7. Portfolio breakdown by region
Taken as a whole, the Pension Fund’s asset portfolio maintained a predominant exposure to the
Euro Zone countries, which represented 98.1% of its total value in 2008. The reduced exposure
to other geographic regions materialised mostly through the equity portfolio.
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 22
Chart 7: Pension Fund’s portfolio breakdown by region
(average 2008 values)
0.7%
0.1%
1.1%
98.1%
Euro Zone
Europe ex-Euro Zone
Asia/Pacific
North America
5.8. Exposure to exchange rate risk
Table 11: Average portfolio exposure to exchange rate risk
Average exposure of the portfolio to
JPY
CHF
GBP
USD
0.04%
0.02%
0.04%
0.11%
exchange rate risk (%)
The risk of funded ratio decline arising from a possible depreciation of the currencies of
denomination of the equity investment vehicles the against the euro was managed by currency
hedging the majority of the value of these assets. As a consequence, the exposure to exchange
rate risk was minimal - approximately 0.21% – and was associated with the tactical asset
management of the portfolio, having made a positive contribution to the return on assets.
The exposure to the USD was the most significant average exposure to exchange rate risk,
representing nearly 0.11% of the total value of the Pension Fund’s portfolio.
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 23
6.
RESULTS AND STATEMENT OF ASSETS AND LIABILITIES OF THE
PENSION FUND
Both the Pension Fund’s liabilities and the assets portfolio were influenced by the real interest
rates rise which was observed in the government inflation-linked market
Liabilities for past services are valued at market prices taking into account interest rates and
expected inflation. The rise in nominal long-term interest rates over 2008 was accompanied by a
more marked decrease in expected inflation. Accordingly, real interest rates rose.
As a result, the value of liabilities for past services (taking into account the impact of pension
payments net of received regular contributions and excluding the impact of exogenous factors)
decreased by 0.5% in 2008. From an integrated management of assets and liabilities perspective
this change sets the reference for the rate of return on assets.
The increase in real interest rates also affected the return on the asset portfolio given the “AssetLiability” emphasis of the investment policy. In fact, given the goal to contain the risk of funded
ratio decline, a strong portfolio exposure to assets correlated to the liabilities was maintained,
particularly long-term inflation-linked Euro Zone treasury bonds. The real interest rates impact
on the value of these assets was crucial to the return on the bond portfolio (-1.0%).
Despite the reduced exposure of the Pension Fund to equities, the marked depreciation of the
main stock indices also restricted the return on the asset portfolio (-1.3%) and ultimately the
asset-liability return.
Table 12: Asset-Liability return
Adjusted change in liabilities
-0.5%
Asset-Liability return
Asset portfolio
Bonds
Equities
Real estate
-0.8% Total assets
-1.0%
-26.4%
6.3%
-1.3%
The asset-liability return (-0.8%) may be attributed to the following contributions:
• A 1.5 percentage point negative contribution of equity markets in a context of marked
financial instability;
• A positive contribution of 0.4 percentage points resulting from the leverage-adjusted
modified duration gap management which corresponded, in practice, to the decision to
maintain the interest rate sensitivity of the asset portfolio lower than the one of the
liabilities
• A positive contribution of 0.3 percentage points associated with the return on real estate
investments.
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 24
Chart 8: Asset-Liability return
2.0%
1.5%
1.0%
0.5%
0.0%
Equities
Real estate
Bonds
Return on
“Assets-Liabilities”
-0.5%
-1.0%
-1.5%
-2.0%
The Pension Fund’s funded ratio in 2008 (100.15%) fell 0.5% compared to the preceding year
(100.68%), as a result of the items identified in Table 13.
Table 13: Change in the Pension’s Fund funded ratio
Change in the funded ratio
Asset-Liability return
Review of assumptions
Exogenous factors and actuarial departures
Extraordinary contribution
% of the value of
liabilities
Million euros
-0.5%
-6.3
-0.8%
-9.9
-1.0%
-12.1
-0.3%
-4.3
1.7%
20.0
Developments in the financial condition
On 31 December 2008, the value of the asset portfolio of the Banco de Portugal Pension Fund
totalled 1,161.3 million euros. Total liabilities for past services amounted to 1,159.6 million
euros.
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 25
Chart 9: Developments in the funded ratio of the Pension Fund
101.0%
100.0%
99.0%
98.0%
97.0%
96.0%
95.0%
2003
2004
2005
2006
2007
2008
At year end, the Fund had an overall funded ratio of 100.15%, reflecting a decrease of 0.5
percentage points compared to that witnessed at the end of 2007.
For the purposes of the Banco de Portugal Notice 12/2001 , as amended by Notice 4/2006, the
funded ratio achieved in 2008 represents 106.0% of the minimum required. If the use of the
facility as defined in Notice 7/2008 had been elected, the funded ratio would have represented
107.3% of the minimum required.
The requirements issued by the Instituto de Seguros de Portugal were also fully met, the
minimum solvency coverage having reached 118.3%.
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 26
Table 8: Financial condition of the Pension Fund
(1)
(2)
Value of the Pension Fund
Liabilities for past services
(L.P.S.)
(3)=(1)/(2)
Funded ratio
(4)
(5)=(3)/(4)
(6)
(7)=(3)/(6)
31-12-2007
31-12-2008
1,183,275,079 1,161,307,823
1,175,298,862 1,159,582,431
100.68%
100.15%
Minimum mandatory funded ratio (BP Notice 12/2001)(*)
Level of coverage achieved
91.1%
110.5%
94.5%
106.0%
Funded ratio of solvency margin
Level of coverage achieved
85.8%
117.4%
84.7%
118.3%
(*) As amended by BP Notice 4/2005
(amounts in euros)
7. PROPOSAL FOR THE APPROPRIATION OF SGFPBP PROFITS
In the 2008 financial year, SGFPBP made net profits of 109,763.06 €, which we propose to
appropriate as follows:
Legal reserve
Free reserves
Total
5,488.15 €
104,274.91 €
109,763.06 €
8. CLOSING REMARKS
The Board of Directors would like to conclude the 2008 Report and Accounts by thanking
Banco de Portugal for its confidence and cooperation.
A word of recognition is also due to the Instituto de Seguros de Portugal for the way it
monitored the business of Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A..
Finally, we would like to highlight the high level of professionalism and dedication of all the
SGFPBP staff.
Lisbon, 12 March 2009
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 27
The Board of Directors
António Manuel Martins Pereira Marta
Chairman
Vítor Manuel da Silva Rodrigues Pessoa
Director
Helena Maria de Almeida Martins Adegas
Managing Director
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 28
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
Balance Sheet and Income Statement
Notes to the Balance Sheet and the Income Statement
Legal Certification of Accounts
Opinion of the Single Supervisor
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 29
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 30
Balance Sheet
Assets
2007
2008
GA
DP
NA
TANGIBLE FIXED ASSETS
Buildings and other constructions
Basic equipment
Office equipment
Other tangible fixed assets
57.131
242.085
2.231.147
16.806
2.547.168
21.190
166.265
1.878.627
14.308
2.080.391
35.940
75.820
352.519
2.498
466.777
41.389
108.582
511.076
241
661.288
117.229
117.229
0
0
0
0
0
0
35.938
492
36.430
0
35.938
492
36.430
0
492
492
1.539.278
0
1.539.278
827.047
0
291.206
1.247
292.453
975.903
1.247
977.150
24.036
154.296
8.750
187.082
0
24.036
154.296
8.750
187.082
17.973
143.480
3
161.456
4.719.640
2.197.620
2.522.020
2.627.433
INTANGIBLE FIXED ASSETS
FIXED ASSETS IN PROGRESS
CURRENT ASSETS
Debtors
State and other public entities
Other debtors
Negotiable securities
Bank deposits and cash
Bank deposits
Cash
291.206
1.247
292.453
ACCRUALS AND DEFERRALS
Accrued income
Deferred costs
Deferred taxes
Total Assets
(in euros)
GA = Gross Assets
DP = Accumulated depreciation and provisions
NA = Net Assets
The Chartered Accountant
Paulo José Antunes Jorge
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 31
Shareholders' Equity and Liabilities
2008
2007
Share capital
1,000,000
1,000,000
Legal reserve
Free reserves
Profits (losses) brought forward
Net profit (loss)
Total Shareholders' Equity
113,373
1,010,259
0
109,763
2,233,396
107,737
903,168
0
112,728
2,123,633
70,345
195,065
0
0
97,515
67,515
165,030
234
1,413
243,935
46,599
292,180
52,398
850
53,249
15,726
830
16,556
288,624
503,800
2,522,021
2,627,433
SHAREHOLDERS' EQUITY
PROVISION FOR RISKS AND CHARGES
LIABILITIES
Creditors
Other shareholders
Other creditors
Suppliers c/a
State and other public entities
ACCRUALS AND DEFERRALS
Accrued costs
Deferred income
Total Liabilities
Total Shareholders' Equity and Liabilities
(in euros)
The Board of Directors
António Manuel Martins Pereira Marta
Vitor Manuel da Silva Rodrigues Pessoa
Helena Maria de Almeida Martins Adegas
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 32
Income Statement
Costs and Losses
2008
2007
Third-party supplies and services
1,133,326
1,080,288
Staff costs
2,024,804
1,965,206
232,739
230,484
49,872
46,165
Other operating costs and losses
7,700
7,675
Provision for risks and charges
44,935
65,104
(A)
3,493,376
3,394,922
0
12
2,839
4,139
3,496,215
3,399,073
Depreciation of tangible and intangible fixed assets
Taxes
Provision for financial investments
Interest and similar costs
(C)
Extraordinary costs and losses
6,112
5,882
(E)
3,502,327
3,404,955
(G)
40,697
3,543,024
43,009
3,447,964
109,763
112,728
3,652,787
3,560,692
Income tax
Net profit (loss)
Total
(in euros)
SUMMARY:
Operating profit (loss): (B) - (A) =
Financial profit (loss): (D-B) - (C-A) =
Current profit (loss): (D) - (C) =
Profit (loss) before taxes: (F) - (E) =
Net profit (loss): (F) - (G) =
7,240
106,739
113,979
150,460
109,763
105,398
54,349
159,747
155,737
112,728
The Chartered Accountant
Paulo José Antunes Jorge
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 33
Income and gains
2008
Services provided
2007
3,489,279
3,489,279
11,337
11,041
3,500,616
3,500,320
Income from negotiable securities and other
financial investments
58,966
56,023
Other interest and similar income
50,611
2,477
3,610,194
3,558,820
42,593
3,652,787
1,872
3,560,692
3,652,787
3,560,692
Supplementary income
(B)
(D)
Extraordinary income and gains
(F)
Total
(in euros)
The Board of Directors
António Manuel Martins Pereira Marta
Vitor Manuel da Silva Rodrigues Pessoa
Helena Maria de Almeida Martins Adegas
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 34
Income Statement by Function of Expense
2008
Sales and services provided
Cost of sales and services provided
2007
3,489,279
0
3,489,279
0
3,489,279
3,489,279
53,931
0
3,485,676
16,650
11,041
0
3,387,247
11,685
Operating profit (loss)
40,883
101,388
Net cost of funds
Gains (losses) in affiliates and associates
Gains (losses) in other investments
0
0
109,577
0
0
54,349
Current profit (loss)
150,460
155,737
40,697
43,009
109,763
112,728
0
0
109,763
112,728
(in euros)
Gross profit (loss)
Other operating income and gains
Distribution costs
Overheads
Other operating costs and losses
Tax on current profit (loss)
Current profit (loss) after taxes
Tax on operating profit (loss)
Net profit (loss)
The Chartered Accountant
Paulo José Antunes Jorge
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 35
Cash Flow Statement
2008
2007
OPERATING ACTIVITIES
Net profit (loss)
Adjustments
Depreciation
Provisions
Financial profit (loss)
Increase in debtors
Decrease in debtors
Increase in stocks
Decrease in stocks
Increase in creditors
Decrease in creditors
Decrease in deferred income
Increase in accrued income
Decrease in accrued income
Increase in deferred costs
Decrease in deferred costs
Increase in accrued costs
Decrease in accrued costs
Increase in deferred income
Gains in disposal of fixed assets
Losses in disposal of fixed assets
Increase in deferred tax assets
Decrease in deferred tax assets
109,763
112,728
232,739
44,935
-50,611
230,484
65,063
-56,023
6,794
-339,302
214,160
-189
-6,063
-1,400
-10,816
-20,272
36,673
21
536
25
-1,815
-8,747
245
CASH FROM OPERATING ACTIVITIES
15,386
543,541
0
355,688
50,611
56,023
-712,464
-38,229
-205,968
-700,082
205,743
-684,696
749,284
0
227,866
977,150
INVESTING ACTIVITIES
Proceeds from:
Financial investments
Tangible fixed assets
Intangible fixed assets
Fixed assets in progress
Subsidies to investments
Interest and similar income
Dividends
Payments related to:
Financial investments
Tangible fixed assets
Intangible fixed assets
CASH FROM INVESTING ACTIVITIES
FINANCING ACTIVITIES
Proceeds from:
Loans obtained
Share capital increases
Supplements and issue premiums
Subsidies and donations
Sale of shares
Coverage of losses
Payments related to:
Loans obtained
Principal payments under financial lease agreements
Interest and similar costs
Dividends
Reduction in share capital and quasi-equity
Acquisition of treasury shares
0
CASH FROM INVESTING ACTIVITIES
CHANGE IN CASH AND CASH EQUIVALENTS
FOREIGN EXCHANGE DIFFERENCES
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEA
CASH AND CASH EQUIVALENTS AT END OF YEAR
977,150
292,453
(in euros)
The Chartered Accountant
Paulo José Antunes Jorge
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 36
Notes to the Balance Sheet and the Income Statement
Incorporation and business activity
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. 677 - C
of the 9th Lisbon Notary Office and its corporate object is to administer, manage and
represent the Banco de Portugal Pension Fund.
Its incorporation was authorised by Executive Order no. 245/88 of 20 April of the
Ministry of Finance.
The notes to the financial statements follow the sequential numbering determined in the
Official Plan of Accounts (Plano Oficial de Contabilidade – POC). Any notes omitted are
either not applicable to the Company or their presentation is not relevant.
3.
VALUATION CRITERIA
The Company’s financial statements were prepared in accordance with accounting
principles generally accepted in Portugal, i.e. going concern, consistency, historical cost,
prudence, substance over form, materiality and accruals.
The valuation criteria adopted by the Company are the following:
• Fixed assets
Fixed assets are valued at their acquisition cost.
Depreciation is calculated over the expected number of useful years, on a constant
straight-line basis. For assets acquired up to and including 1993, an annual depreciation
charge is used, while for assets acquired at a later stage, the yearly charge corresponds to
the number of months since the asset entered into service.
Depreciation rates comply with the Portuguese tax legislation. The resulting useful life is
close to the useful life of the assets.
Annual percentage
Basic equipment
Office, social equipment and sundry
furniture
Other tangible fixed assets
10%
10 a 33.33%
12.5%
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 37
Depreciation rates are applied as follows:
• Marketable securities
Marketable securities are valued at their acquisition cost, which includes all acquisitionrelated costs.
Provisions were set up aimed at full coverage of the value of capital losses in the
securities portfolio and corresponding to a decline in the market value against the
acquisition cost of securities, where the former is lower.
• Recognition of costs and income
Costs and income are recognised when they occur, taking into account the period to
which they refer and regardless of their actual financial settlement.
6.
DEFERRED TAXES
The tax effect of temporary differences between the accounting and tax results was
recognised in the context of Corporate Income Tax (CIT). These differences concern
provisions for depreciation of the securities portfolio.
Change in deferred tax assets
Description
Temporary differences originating deferred tax asets
Provisions not deductible for tax purposes
Total
Amounts recognised in the Balance Sheet (25%
Total 2008
Write-backs -Differences
Total 2007
0
0
35,000
12
35,000
12
8,750
3
8,747
(in euros)
7.
STAFF
During 2008, the average number of staff in the Company was 33.
10.
FIXED ASSETS
Movements in this heading were as follows:
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 38
Opening Balance
Increases
Write-offs
Closing Balance
TANGIBLE FIXED ASSETS
Gross assets
Buildings and other erections
Basic equipment
Office equipment
57,131
0
0
57,131
242,085
0
0
242,085
2,220,845
35,589
25,287
2,231,147
17,264
2,640
3,098
16,806
117,229
0
0
117,229
38,229
28,385
2,664,398
Other tangible fixed assets
INTANGIBLE FIXED ASSETS
0
FIXED ASSETS IN PROGRESS (i)
2,654,554
0
Accumulated depreciation
Buildings and other erections
Basic equipment
Office equipment
15,742
5,473
25
21,190
133,503
32,762
0
166,265
1,709,769
194,146
25,287
1,878,628
17,023
358
3,074
Other tangible fixed assets
Other expenses
14,307
117,229
117,229
Research and development expenses
1,993,266
232,739
28,386
2,197,619
661,288
Net Assets
466,779
(in euros)
(i) See Note 14.
14.
FIXED ASSETS IN PROGRESS
At the end of the 2008 financial year, there were no fixed assets in progress.
17.
NEGOTIABLE SECURITIES
This heading is broken down as follows:
2008
2007
FIXED INCOME SECURITIES
Public debt
1,395,003
147,116
144,275
393,524
1,539,278
540,640
Participation certificates
0
0
Investment funds
0
286,420
0
286,420
0
12
Sundry
VARIABLE INCOME SECURITIES
Provision for short-term investments
Net
1,539,278
827,047
(in euros)
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 39
32.
GUARANTEES ISSUED
As at 31 December 2008, the Company had issued guarantees to the sum of 70,345 euros,
mostly related to pending litigation.
34.
MOVEMENTS IN PROVISIONS
Movements in the provision for cash investments were as follows:
Opening
Balance
Provision for short-term investments (i)
Provision for risks and charges
Increase
12
195,065
195,077
Write-backs
0
44,935 (i)
Closing
Balance
12
0
169,655
70,345
70,345
(in euros)
(i) The provision for risks and charges was created to address possible litigation
contingencies of a compensatory nature and was increased by 9,935 euros.
As a result of implementation of the Business Continuity Plan, several charges, attributable
to both the 2008 and preceding financial years, were found and originated an increase of
35,000 euros in the provision for risks and charges.
35.
SHARE CAPITAL
The Company’s fully subscribed and paid up share capital is 1,000,000 euros, represented by
two hundred thousand shares with a nominal value of five euros each.
37.
SHAREHOLDINGS
The Banco de Portugal holds 97.77% of the share capital, corresponding to 195,544 shares.
40.
MOVEMENTS IN SHAREHOLDERS’ EQUITY
The increases that occurred in the financial year were in line with the proposal for the
appropriation of profits submitted by the Board of Directors and approved by the
Shareholders’ Meeting.
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 40
Movements in the financial year were as follows:
Opening Balance
Increases
Decreases
Closing Balance
Share capital
1,000,000
1,000,000
Legal reserve
107,737
5,636
113,373
Free reserves
903,168
107,092
1,010,259
Net profit (loss)
112,728
109,763
112,728
109,763
2,123,633
222,491
112,728
2,233,396
(in euros)
45.
FINANCIAL INCOME STATEMENT
Costs and Losses
2008
Interest paid
Income and Gains
2007
77
55
Provision for short-term
investments
0
12
Losses in disposal of shortterm investments
0
294
2,762
3,790
106,739
54,349
109,578
58,500
Other financial costs and
losses
Financial profit (loss)
Total
2008
2007
Interest received
58,966
56,023
Gains in disposal of shortterm investments
50,611
2,477
Total
109,578
58,500
(in euros)
46.
EXTRAORDINARY INCOME STATEMENT
Costs and Losses
Losses in fixed assets
Fines and penalties
Increase in depreciation and
provisions
Corrections to preceding years
Other extraordinary costs and
losses
Extraordinary profit (loss)
Total
2008
Income and Gains
2007
0
0
253
2008
2007
Gains in fixed assets
0
1,815
672
Contractual penalties received
0
0
0
0
Reduction in depreciation and
provisions
12
53
5,851
5,185
Corrections to preceding years
99
0
8
25
Other extraordinary income and
gains
42,482
4
36,482
-4,010
42,594
1,872
Total
42,594
1,872
(in euros)
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 41
48.
OTHER RELEVANT INFORMATION
Bank deposits
This heading is broken down as follows:
2008
Demand deposits
Term deposits
2007
91,206
29,903
200,000
946,000
291,206
975,903
(in euros)
State and other public entities
Value Added Tax - VAT
VAT recorded in SGFPBP’s accounts relates to a self-assessment and payment resulting
from services provided by a non-resident entity.
Income tax – CIT
Income tax is calculated on the basis of the forecast value payable, at the rates prevailing
on the date of the balance sheet, and are booked under State and other public entities.
In accordance with the legislation in force, the tax authorities may review the tax returns
during a four-year period and this may lead to corrections to taxable profits and
additional assessments concerning the financial years from 2004 up to and including
2008. The Board of Directors is of the opinion that any additional assessment will not
materially impact on the financial statements.
Services provided
Services provided exclusively concern management fees, whose amount is set on an
annual basis in accordance with the management agreement entered into by and between
Banco de Portugal and SGFPBP.
Following a resolution of the SGFPBP Board of Directors, the management fees for
2008 were set at 3,489,279 euros.
Supplementary income
This income relates to revenues from a sublease agreement and reimbursement of
additional charges incurred by SGFPBP related to the secondment of an employee of a
third-party entity who is at the Company’s service.
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 42
Staff costs
This heading includes training costs directly borne by the Company and costs with its
staff, notably the participants in a secondment agreement executed with the Banco de
Portugal.
Accruals and deferrals
This heading includes payments made during the financial year regarding costs of the
following year, notably software licence fees.
Suspense accounts
Pursuant to no. 3.1 of Standard no. 12/95-R of 6 July of the Instituto de Seguros de
Portugal, the accounts of the Banco de Portugal Pension Fund are booked in class 0 Off-balance sheet accounts, under the following main headings:
01 - Banco de Portugal Pension Fund; and
02 - Management of the Banco de Portugal Pension Fund.
As at 31 December 2008, these accounts were balanced and amounted to 1,161,307,823
euros.
The Chartered Accountant
Paulo José Antunes Jorge
The Board of Directors
António Manuel Martins Pereira Marta
Vítor Manuel da Silva Rodrigues Pessoa
Helena Maria de Almeida Martins Adegas
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 43
Legal Certification of Accounts
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 44
Ernst & Young
Audit & Associados – SROC, S.A.
Avenida da República, 90, 6th floor
1600-206 Lisbon
ERNST & YOUNG
Portugal
Tel: +351 217 912 000
Fax: +351 217 957 586
www.ey.com
Legal Certification of Accounts
Introduction
1. We have examined the attached financial statements of Sociedade Gestora do Fundo
de Pensões do Banco de Portugal, which comprise the Balance Sheet as at 31
December
2008
(which
shows
total
assets
of
2,522,020
euros
and
total
shareholders’ equity of 2,233,396 euros, including net profits of 109,763 euros), the
Income Statements by nature and function of expense and the Cash Flow Statement
for the year ended on the aforementioned date, as well as the corresponding Notes.
Responsibility
2. The Board of Directors is responsible for preparing financial statements that give a
true and fair picture of the financial condition of the Company, the results of its
operations 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 a professional and independent opinion on the
basis of our examination of the aforementioned financial statements.
Scope
4. The examination we carried out was made pursuant to the Review/Audit Technical
Standards and Guidelines issued by the Statutory Auditors’ Association, which
______________________________________________________________________
Limited liability company * Share capital 1,105,000 euros * Registered in the Statutory Auditors’ Association under no. 178 * Registered in the CMVM under
no. 9011 * Taxpayer no. 505 988 283 * Registered in the Lisbon Commercial Registry under the same number * A member of Ernst & Young Global Limited
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 45
require that the same be planned and executed with a view to obtaining a reasonable
degree of certainty that the financial statements are free of material distortions. To
this end, the aforementioned examination includes:
− verification, on a sampling basis, of documentation supporting the sums and
disclosures in the financial statements and an evaluation of the estimates, on the
basis of judgements and criteria defined by the Board of Directors, used in their
preparation;
− an assessment as to whether the accounting policies and the disclosures adopted
are appropriate, given the circumstances;
− verification that the accounts were prepared on a going-concern basis; and
− an overall assessment as to whether the presentation of the financial statements is
appropriate.
5. Our examination also included an assessment as to whether the financial information
contained in the Management Report is consistent with the financial statements.
6. We believe that the examination carried out provides an acceptable basis for
expressing our opinion.
Opinion
7. In our opinion, the aforementioned financial statements give a true and fair picture,
in all materially relevant aspects, of the financial condition of Sociedade Gestora do
Fundo de Pensões do Banco de Portugal as at 31 December 2008, the results of its
operations and cash flows for the financial year ended on the aforementioned date,
in accordance with accounting principles generally accepted in Portugal.
Lisbon, 19 March 2009
The Statutory Auditor
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)
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 46
Opinion of the Single Supervisor
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 47
Ernst & Young
Audit & Associados – SROC, S.A.
Avenida da República, 90, 6th floor
1600-206 Lisbon
ERNST & YOUNG
Portugal
Tel: +351 217 912 000
Fax: +351 217 957 586
www.ey.com
Report and Opinion of the Single Supervisor
To the Shareholders
In compliance with the provisions of articles 420 and 421 of the Commercial Companies
Code and in the performance of our duties as Single Supervisor of Sociedade Gestora do
Fundo de Pensões do Banco de Portugal, concerning the financial year ended 31
December 2008, we have inspected the acts of the Board of Directors, evaluated the
degree of compliance with the law and the articles of association, periodically assessed
the
Company’s
accounting
books
and
records,
as
well
as
their
supporting
documentation, tested transactions and balances on a sampling basis and executed
other procedures deemed necessary given the circumstances.
We have further examined the Balance Sheet, the Income Statement by nature and
function of expense and the Cash Flow Statement and their corresponding Notes, as well
as the underlying accounting principles.
The Board of Directors and the services promptly provided us with any clarifications and
information we required, and we would like to thank them for their assistance.
On the date hereof, we have issued an unqualified Legal Certification of Accounts, which
forms an integral part of this report.
______________________________________________________________________
Limited liability company * Share capital 1,105,000 euros * Registered in the Statutory Auditors’ Association under no. 178 * Registered in the CMVM under
no. 9011 * Taxpayer no. 505 988 283 * Registered in the Lisbon Commercial Registry under the same number * A member of Ernst & Young Global Limited
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 48
In the light of what was said in the Legal Certification of Accounts, we are of the opinion
that:
a)
You should approve the 2008 Management Report and the Accounts submitted
by the Board of Directors;
b)
You should approve the proposal concerning the appropriation of profits
contained in the aforementioned Management Report.
Lisbon, 19 March 2009
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)
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 49
Banco de Portugal Pension Fund
Statement of Assets and Liabilities and Income and Expenditure Statement
Notes to the Statement of Assets and Liabilities and the Income and
Expenditure Statement
Certification of Accounts
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 50
Statement of Assets and Liabilities - FPBP
(in euros)
Investments of the Fund
Note
2008
2007
Land and buildings
4
70,331,254
70,658,614
Property under negotiation
4
0
20,815,000
Credit securities
5
1,076,454,523
1,066,194,584
Cash and bank deposits
6
8,801,374
31,364,861
Debtors and creditors
7
-4,027,908
-15,811,058
Accruals and deferrals
8
9,748,581
10,053,078
1,161,307,823
1,183,275,079
(See attached Notes)
(in euros)
Value of the Fund
Note
Opening assets
2008
2007
4,987,979
4,987,979
1,178,287,100
1,203,562,056
-21,967,256
-25,274,956
1,161,307,823
1,183,275,079
Accumulated profits (losses) and
contributions
Preceding years
For the year
9
(See attached Notes)
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 51
Income and Expenditure Statement - FPBP
(in euros)
Increase in the Value of the Fund
Note
2008
2007
Contributions
10
44,000,681
22,677,305
Income
11
31,170,736
32,825,487
Capital gains
12
97,212,582
62,988,657
12,587
69,917
172,396,586
118,561,366
Other income
(in euros)
Decrease in the Value of the Fund
Pensions payable
Note
13
Intermediation fee
Taxes
2008
2007
50,727,272
48,768,831
0
0
1,670
3,834
Capital losses
12
142,951,884
93,009,294
Other expenses
14
683,016
2,054,363
194,363,842
143,836,321
-21,967,256
-25,274,956
Profit (loss) for the year
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 52
Notes to the Statement of Assets and Liabilities and the Income and Expenditure
Statement
1.
CREATION AND BUSINESS
The Banco de Portugal Pension Fund (the “Pension Fund”) was created by the Banco de
Portugal, in its capacity as founder associate, by public deed executed on 15 September
1988 in the Lisbon 9th Notary Office. SGFPBP executed this deed in its capacity as
managing company, a quality it acquired under its previous execution of a fund
management agreement with the Banco de Portugal.
The Pension Fund is composed of autonomous assets earmarked exclusively for the
fulfilment of the Banco de Portugal’s commitment to pay retirement, disability and
widower’s pensions, as well as charges for post-retirement contributions to the healthcare
and welfare service (SAMS). It is a closed fund, operating a defined benefit scheme, and
plays the role of first pillar of social protection.
2.
FINANCIAL STATEMENTS
The attached accounts were prepared in accordance with the accounting records of
Sociedade Gestora do Fundo de Pensões do Banco de Portugal.
These accounts summarise the Pension Fund’s transactions and net assets. They do not
take into account liabilities relating to pensions or other benefits payable in the future. The
Pension Fund’s actuarial position, including these liabilities, is shown in the actuarial
report. These financial statements should be read in conjunction with the aforementioned
report (See Note 15).
3.
ACCOUNTING PRINCIPLES
a)
General
The financial statements were prepared in accordance with accounting principles
generally accepted in Portugal and in accordance with the rules issued by the Instituto
de Seguros de Portugal (ISP).
The accounts were prepared under the historical cost convention (modified to
include the revaluation of investment in land, buildings and credit securities) and on
a going-concern basis, pursuant to the fundamental accounting principles of
consistency, prudence and accruals.
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 53
b)
Land and buildings
Land and buildings are initially recognised at their acquisition cost plus acquisition
expenses. Subsequently, this value is reassessed by independent entities, in
accordance with the provisions of Standard no. 9/2007 of 28 June of the Instituto
de Seguros de Portugal.
Unrealised capital gains and losses arising from the revaluation of real estate are
recorded in the Income and Expenditure Statement, in the financial year in which
the revaluation is made.
c)
Credit securities
Financial investments in the portfolio on 31 December 2008 are valued at their fair
value in accordance with Standard no. 9/2007 of 28 June of the Instituto de Seguros
de Portugal. Pursuant to this Standard, an economic methodology adapted to the
type of financial asset in question is applied to securities whose listing price
significantly departs from their fair market value.
In the terms of the applicable legislation, the portfolio of listed securities with
reduced liquidity in regulated markets and chiefly traded over the counter is valued
by using prices made available by the main financial information agencies.
The difference between the fair value of the securities and their respective
acquisition cost is booked under capital gains and losses, as the case may be, in the
Income and Expenditure Statement. The difference between the proceeds from the
sale of securities and their book value is also booked under the same headings.
d)
Contributions
Upon actual receipt, Banco de Portugal’s contributions to the Pension Fund are
booked under contributions to the Income and Expenditure Statement (see Note
10).
e)
Income
Income from real estate rents and securities is booked in the period to which it
refers, save for dividends, which are only recognised upon actual receipt.
f)
Pensions
Pensions are paid to the beneficiaries by the Banco de Portugal, which is
subsequently fully reimbursed by the Pension Fund, on a monthly basis (see Note
13).
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 54
g)
Fees
Fees are booked under the corresponding heading in the Income and Expenditure
Statement in the period to which they refer, regardless of their date of payment.
Fees as yet unpaid are booked against accrued costs and prepaid fees are booked
under deferred costs (see Note 8 a)).
h)
Derivatives
Foreign exchange forward contracts executed to hedge the foreign exchange risk
associated with the securities portfolio are revalued at the foreign exchange rates
corresponding to their remaining maturity, as implied in the forward exchange rates
(average bid/ask price as at the revaluation date) released by internationally
recognised financial information systems. Any differences between the equivalent in
euros to the forward revaluation rates applied and the equivalent in euros to the
rates agreed represent revaluation income or costs, which are booked under
increases or decreases in the value of the Pension Fund, respectively, notably capital
gains and losses, against accruals and deferrals.
i)
Taxation
Pension funds are exempt from Corporate Income Tax and Property Tax, in
accordance with the Tax Benefit Act.
4.
LAND AND BUILDINGS
(in euros)
2007
2008
Date of Last
Valuation
Investment Value
Adjustments
Book Value
Book Value
Avenida da República
2008
8,055,047
10,117,593
18,172,640
18,500,000
Avenida da Liberdade
Edifício Libersil
2006
10,045,180
4,354,820
14,400,000
14,400,000
Avenida de Berna
Espaço Berna
2006
12,796,688
1,123,312
13,920,000
13,920,000
Edifício Y
2006
4,537,154
1,062,846
5,600,000
5,600,000
Edifício Castilho
2007
18,245,203
-6,589
18,238,614
18,238,614
53,679,272
16,651,982
70,331,254
70,658,614
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 55
The investment value includes the base price, legal charges and other expenses. The
adjustments correspond to unrealised capital gains in the 2008 financial year, to the
amount of 327,360 euros, and in preceding years (capital gains of 16,979,342 euros).
Valuations should be made every three years, or earlier when there are materially relevant
differences between the net book value of the building and its market value.
In 2008, the following unrealised capital gains were identified:
(in euros)
Potential Capital Gains
Building
Avenida da República
-327,360
Total
-327,360
5.
CREDIT SECURITIES
(in euros)
2008
Acquisition Cost
2007
Adjustments
Market Value
Market Value
VARIABLE INCOME SECURITIES
Unit
Investment fund units
103,513,614
14,153,615
117,667,229
163,165,059
1,024,640,310
-71,137,033
953,503,276
892,331,696
4,997,357
286,660
5,284,017
4,980,794
0
0
0
5,717,035
1,133,151,281
-56,696,758
1,076,454,523
1,066,194,584
FIXED INCOME SECURITIES - BONDS
Public Debt
Other supranational issuers
Other issuers
The adjustments correspond to unrealised capital gains or losses calculated as the
difference between the market value and the historic acquisition cost. In 2008, net
unrealised capital gains and losses recognised in the Income and Expenditure Statement
amounted to -26,960,987 euros (see Note 12 (i)). The remaining 29,735,771 euros
concerns preceding years.
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 56
6.
CASH AND BANK DEPOSITS
This heading is broken down as follows:
(in euros)
2008
Cash
Demand deposits
Term deposits
2007
719
719
600,655
1,464,142
8,200,000
29,900,000
8,801,374
31,364,861
7.
DEBTORS AND CREDITORS
This heading is broken down as follows:
(in euros)
2008
2007
CURRENT ASSETS
Taxes (a)
450
450
126,584
120,895
0
3,094,098
693
693
127,727
3,216,136
0
31,647
46,409
346,697
Creditors – Buildings (b)
148,726
18,534,938
Other
116,666
113,912
3,843,835
0
4,155,635
19,027,194
-4,027,908
-15,811,058
Lessees
Derivatives (c)
Other
CURRENT LIABILITIES
Brokers and financial intermediaries
Taxes (a)
Derivatives (c)
Net
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 57
(a)
Taxes - VAT
This heading essentially concerns the VAT paid in the renovation works of Edifício
Libersil, to be brought forward to future years.
(b)
Creditors - Buildings
In 2008, this heading included sums concerning a transaction relating to a building
whose deed was executed at the beginning of 2008.
(c)
Derivatives
The policy on the use of derivatives was based exclusively on the use of foreign
exchange forward contracts to hedge the foreign exchange risk in exchange traded
funds denominated in four separate currencies: pound sterling, US dollar, Japanese
yen and Swiss franc. Since there were no underlying assets on 31 December 2008,
the foreign exchange forward contract position recognised on this date corresponds
only to contracts to be matured, whose net value is not very material.
8.
ACCRUALS AND DEFERRALS
This heading is broken down as follows:
(in euros)
2008
2007
9,740,865
9,990,444
17,095
62,305
-9,708
0
329
329
9,748,581
10,053,078
Interest receivable
From credit securities
From term deposits
Other accruals and deferrals
Accrued costs– a)
Other
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 58
9.
VALUE OF THE FUND
Changes in the value of the Fund were as follows:
(in euros)
2008
2007
VALUE OF THE FUND AS AT 31 DECEMBER
1,183,275,079
Increase due to contributions (Note 10)
Member contributions
21,841,142
Beneficiary contributions
2,159,539
Extraordinary contributions
20,000,000
44,000,681
Decrease due to matured pensions and repayments (Note 13)
50,728,942
Financial profit (loss)
-15,238,995
-21,967,256
VALUE OF THE FUND AS AT 31 DECEMBER
(A)
1,161,307,823
To recall:
LIABILITIES FOR PAST SERVICES
(B)
1,175,298,862
Excess compared to liabilities (A-B)
1,159,582,431
1,725,392
10.
CONTRIBUTIONS
Current contributions include, in addition to the component paid by the Banco de
Portugal, contributions from its staff in the conditions laid down in their corresponding
pension plans.
11.
INCOME
This heading includes the following types of income:
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 59
(in euros)
2008
Land and buildings
2007
4,290,596
6,905,292
2,063,669
2,937,395
23,998,589
22,371,928
231,700
66,241
98,739
129,016
26,392,697
25,504,580
58,645
53,861
428,798
361,754
487,444
415,615
31,170,736
32,825,487
Credit securities
Real estate and securities investment funds
Bonds
Public debt
Other public issuers
Other issuers
Demand deposits
Term deposits
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 60
12.
CAPITAL GAINS AND LOSSES
Capital gains and losses recognised in the year are broken down as follows:
(in euros)
2008
2007
UNREALISED CAPITAL GAINS AND LOSSES
Land and buildings
Capital gains
Capital losses
0
7,785,546
327,360
1,580,184
-327,360
6,205,362
60,595,963
6,549,350
Credit securities
Capital gains
Capital losses
87,556,950
46,162,710
-26,960,987
-39,613,360
Capital gains
6,693
1,140
Capital losses
4,706
5,512
1,987
-4,372
Capital gains
0
4,204,900
Capital losses
0
0
0
4,204,900
Capital gains
15,397,505
1,057,603
Capital losses
31,607,694
6,545,217
-16,210,188
-5,487,614
(i)
Other
REALISED CAPITAL GAINS AND LOSSES
Land and buildings
Credit securities
Derivatives
Capital gains
17,644,048
42,723,577
Capital losses
20,503,933
38,150,801
-2,859,885
4,572,776
Capital gains
3,568,373
666,541
Capital losses
2,951,241
564,870
617,132
101,671
Total capital gains
97,212,582
62,988,657
Total capital losses
142,951,884
93,009,294
Net capital gains (losses)
-45,739,302
-30,020,637
Other
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 61
13.
PENSIONS AND CAPITAL MATURED
This heading is broken down as follows:
(in euros)
2008
Pensions paid
2007
46,060,289
44,270,135
Capital matured
1,327,608
669,274
Pension payment charges
2,883,700
2,910,124
266,647
313,026
50,538,244
48,162,560
141,280
515,861
47,749
90,410
50,727,272
48,768,831
Death benefit
Sub-Total
Repayments
Transfer of rights
Total
14.
OTHER EXPENSES
This heading is broken down as follows:
(in euros)
2008
Financial - a)
123,758
125,666
Buildings - b)
491,507
1,620,005
67,750
308,691
0
1
683,016
2,054,363
Extraordinary expenses
Other expenses
a)
2007
Financial expenses
This heading covers expenses borne by the Pension Fund related to the financial
asset global custody service.
b)
Expenses on buildings
This heading covers normal building management and maintenance costs.
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 62
15.
INFORMATION CONTAINED IN THE ACTUARIAL REPORT
As an integral part of its report, SGFPBP publishes the actuarial results pertaining to the
Banco de Portugal Pension Fund as at 31 December 2008.
16.
TAX LIABILITIES
The Banco de Portugal assumes the tax liabilities under the agency agreement entered into
with SGFPBP on 17 October 2006. This Agreements states that the Banco de Portugal
shall:
a)
b)
c)
pay retirement and widower’s pensions to their respective beneficiaries on behalf
and on the instructions of SGFPBP;
withhold any contributions and taxes due, for subsequent delivery to the competent
authorities;
settle the sums paid and the contributions owed to the Pension Fund related to the
Bank’s employees through an offsetting procedure, in the terms of sub-paragraph
a).
The Banco de Portugal has complied and will continue to comply with the
aforementioned agreement as long as the same remains in force, and shall assume all the
inherent liabilities.
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 63
Certification of Accounts
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 64
ERNST & YOUNG
Ernst & Young
Audit & Associados – SROC, S.A.
Avenida da República, 90, 6th floor
1600-206 Lisbon
Portugal
Tel: +351 217 912 000
Fax: +351 217 957 586
www.ey.com
Certification of Accounts
Introduction
1. We have examined the attached financial statements of Fundo de Pensões do Banco
de Portugal (the “Fund”), which comprise the Statement of Assets and Liabilities as
at 31 December 2008 (which shows total investments of 1,161,307,823 euros and a
value of the Fund to the same amount, including net losses of 21,967,256 euros),
the Income and Expenditure Statement for the year ended on the aforementioned
date, as well as the corresponding Notes.
Responsibility
2. The Board of Directors of Sociedade Gestora do Fundo de Pensões do Banco de
Portugal is responsible for preparing financial statements that give a true and fair
picture of the assets and liabilities of the Fund and the results of its operations, as
well as for adopting appropriate accounting policies and criteria and maintaining an
appropriate internal control system.
3. We are responsible for expressing a professional and independent opinion on the
basis of our examination of the aforementioned financial statements.
Scope
4. The examination we carried out was made pursuant to the Review/Audit Technical
Standards and Guidelines issued by the Statutory Auditors’ Association, which
______________________________________________________________________
Limited liability company * Share capital 1,105,000 euros * Registered in the Statutory Auditors’ Association under no. 178 * Registered in the CMVM under
no. 9011 * Taxpayer no. 505 988 283 * Registered in the Lisbon Commercial Registry under the same number * A member of Ernst & Young Global Limited
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 65
require that the same be planned and executed with a view to obtaining a
reasonable degree of certainty that the financial statements are free of material
distortions. To this end, the aforementioned examination includes:
− verification, on a sampling basis, of documentation supporting the sums and
disclosures in the financial statements and an evaluation of the estimates, on the
basis of judgements and criteria defined by the Board of Directors of Sociedade
Gestora do Fundo de Pensões do Banco de Portugal, used in their preparation;
− an assessment as to whether the accounting policies and the disclosures adopted
are appropriate, given the circumstances;
− verification that the accounts were prepared on a going-concern basis; and
− an overall assessment as to whether the presentation of the financial statements is
appropriate.
5. Our examination also included an assessment as to whether the financial information
contained in the Management Report is consistent with the financial statements.
6. We believe that the examination carried out provides an acceptable basis for
expressing our opinion.
Opinion
6. In our opinion, the aforementioned financial statements give a true and fair picture,
in all materially relevant aspects, of the financial condition of Fundo de Pensões do
Banco de Portugal as at 31 December 2008 and the results of its operations for the
financial year ended on the aforementioned date, in accordance with accounting
principles generally accepted in Portugal and the Standards issued by the Instituto
de Seguros de Portugal for the pension fund industry.
Lisbon, 19 March 2009
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)
Report and Accounts | 2008
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. | 66
Report and Accounts | 2008