cajas 2010 ing v1 · 1.00‰ of the calculation basis established in articles 3 and 4 of royal...
TRANSCRIPT
DEPOSIT GUARANTEE FUND FOR SAVINGS
BANKS
FONDO DE GARANTÍA DE DEPÓSITOS EN CAJAS DE AHORRO
ANNUAL REPORT 2010
SPAIN
Approved by the Management Committee on May 17, 2011
This document is a partial translation of the Spanish original and it has been prepared for the
convenience of readers and in the event of ambiguity, the Spanish text will prevail. The Spanish
version can be downloaded from the web site (www.fgd.es) or can be requested to:
Fondo de Garantía de Depósitos en Cajas de Ahorro
José Ortega y Gasset, 22
28006 Madrid – España
TABLE OF CONTENTS
Pages
MANAGEMENT REPORT ........................................................................................................ 4
ANNUAL ACCOUNTS ............................................................................................................. 11
Balance Sheet ...................................................................................................................... 12
Profit and loss account ......................................................................................................... 14
Statement of changes in equity ........................................................................................... 15
Cash flows statement ........................................................................................................... 16
INDEPENDENT AUIDITORS’ REPORT ..................................................................................... 18
4
DEPOSIT GUARANTEE FUND FOR SAVINGS BANKS
MANAGEMENT REPORT FOR THE YEAR 2010
Activity during the year
1. Management and administration of Deposit Guarantee Fund for Savings Banks (hereinafter
FGDCA) during the year 2010 have been carried out by the Fund’s Management Company
(Sociedad Gestora de los Fondos de Garantía de Depósitos en Entidades de Crédito, A.I.E.) in
accordance with the terms of the contract signed with this latter on June 29, 2000, and have been
in line with the guidelines issued by the FGDCA to the Management Company in previous years, as
follows.
Action plan in Caja de Ahorros de Castilla-La Mancha
2. Following the relevant selection process for the possible integration of Caja de Ahorros de
Castilla-La Mancha (hheerreeiinnaafftteerr CCM) with another credit institution, under conditions of
competition and with the collaboration of consultants chosen from those with the necessary
experience and prestige in this type of work, the administrators of CCM, appointed by the Banco de
España sent the offer of Caja de Ahorros de Asturias (Cajastur) as the best of those received.
Following its approval by the Banco de España, the offer was also approved by the FGDCA
Management Committee on November 3, 2009.
Following the necessary definition of the different aspects, the characteristics of the relevant
Action Plan were reflected in a basic integration protocol which was entered into on February 5,
2010 by FGDCA, CCM, Cajastur and Banco de Castilla La Mancha SA (formerly Banco Liberta SA, a
subsidiary of Cajastur, hereinafter “BCM”) and subsequently replaced by novation through the
addenda signed on April 9, 2010 by the same. These aspects were also recorded in the framework
agreement entered into between FGDCA and CCM on May 26, 2010.
In accordance with that Action Plan the assets and liabilities that made up the banking business of
CCM were segregated with effect January 1, 2010 and contributed to BCM in exchange for a 25%
interest in its capital, which could be reduced for the existence of hidden defects in that banking
business. BCM was also provided with assurance with respect to 75% of the market risk that could
affect the listed securities portfolio included in the aforementioned assets and liabilities from that
date to the time of actual delivery.
Similarly, the Action Plan lays down the delivery to FGDCA, effective January 1, 2010, of CCM’s
other transferable assets and liabilities not included in the banking business or associated with
Community Projects, in exchange for the funds advanced by the former plus the assumption of the
results of the market risk coverage mentioned above. It also establishes that as FGDA
compensation for any losses that might finally arise for FGDCA on this transaction, CCM would
5
transfer it a part of its interest in the capital of BCM, up to a maximum of 15% of that bank’s
capital, deriving from the 25% received. The Action Plan also envisages the contracting by FGDCA
with a specialist subsidiary of Cajastur of divestment and management services in order to maintain
the value of the non-cash items received.
Finally, the Action Plan provides that FGDA will grant an asset protection arrangement with respect
to the damaged credit risks, included in the banking business items transferred by CCM to BCM, of
up to a maximum of €2,475 million and the advance of financing for a similar amount to be
reimbursed in due course, following the discounting of the damages that would finally have to be
borne under that arrangement and a success fee on the basis of the gain/(loss) on the portfolio in
question.
In order to formalise such aspects in detail with respect to the part pertaining to FGDCA, on
September 21, 2010 the latter entered into a receipt contract, by way of dation in payment, of the
transferrable assets and liabilities of CCM not included in the banking business or associated with
Community Projects. On December 3, 2010 it entered into a contract for divestment and
management services in order to maintain the value of the non-cash items received and on
December 7, 2010 it entered into the contract that governs the final aspects of the data protection
arrangement.
Lastly, given that it had been agreed that the transfer of assets and liabilities by CCM to BCM and
FGDCA would be completed effective on January 1, 2010 and from that date to the actual transfer
of such items there were numerous collections and payments initially settled for an amount
different from that at which the corresponding asset and liability would finally be reflected, it has
been necessary to carry out a closing by way of the settlement of such items, formalised through an
agreement entered into on April 1, 2011, with which the Action Plan was brought to an end and the
economic effects of which were already known and figure in FGDCA’s accounts at December 31,
2010.
In order to cover the financial needs of CCM while the aforementioned Action Plan was
implemented, following the agreement of the Management Committee on March 18, 2010, FGDCA
had provided to that entity additional support of €350 million, that was added to the €1,300 million
granted in 2009, such that at the time of the formalisation of the transfer of assets and liabilities by
CCM to FGDA on September 21, 2010, as detailed, the funds advanced by the latter amounted to
€1,650 million.
OOtthheerr aaccttiivviittiieess
3. Other activities have focused on the actions and criteria followed in the last few years with
respect to :
* Management of assets and liabilities not committed on operations associated with its objects
through investment in Government debt. Investments amounted to €4,734,537.6 thousand
(€2,252,490 thousand in 2009), of which €4,319,266.5 thousand was invested in repos.
6
Divestments amounted to €5,734,517.5 thousand (€4,437,651 thousand in 2009). Interest on
investments amounted to €57,605.2 thousand (€103,233 thousand in 2009), which, on an average
investment of €1,852.410 thousand, generated an average return of 3.11% (3.23% in 2009).
Financial income as a whole amounted to €76,114.2 thousand (€103,739.8 thousand in 2009).
Financial results as a whole, taking into account other financial income and expense, reflects a net
gain of €61,527.8 thousand (€129,089.4 thousand in 2009), which is less than in the previous year
owing to a decrease in the market return, the fall in the gain on divestments and EPA financing
costs.
As a result of the payments resulting from the CCM Action Plan, detailed in this report, government
debt amounting to €1,170,511.1 thousand has been disposed of at an accounting cost of
€1,156,121 thousand, generating a final gain of €14,390.1 thousand.
* Management of third party debts acquired in previous years from failed savings banks.
* With respect to other actions, noteworthy are the actions necessary to know and manage the
assets acquired from CCM, preparation of management commissions, actual implementation of the
decisions adopted and analysis of the level of FGDA cover on the basis of its equity.
4. Article 2.4 of Royal Decree-law 9/2009, of June 26, on banking restructuring and credit
institution equity reinforcement which, among other things, creates the Fund for Orderly Bank
Restructuring, establishes the obligation for the three Deposit Guarantee Funds (for Banking
Establishments, Savings Banks and Credit Cooperatives Banks) to endow the FROB with €2,250
million, which will be allocated among them according to the percentage that the deposits in their
respective adhered entities amount over the total deposits in all credit institutions at the end of
2008. The percentage corresponding to the Deposit Guarantee Fund for Savings Banks amounts to
56.47% at 2009, with a resulting disbursement of €1,270,663.6 thousand.
During the 2010 period, €42,886.9 thousand, have been added as impairment of the participation
in FROB. This amount is derived from the net equity as at December 31, 2010 according to audited
financial statements.
5. The Resolution of the Ministry of Economy of August 1, 2002, issued in accordance with paragraph
3, article 74 of Law 24/2001, of December 27, on Tax, Administrative and Labour Matters, fixed the
contributions payable by the Investment Guarantee Fund and the Deposit Guarantee Funds as a
percentage of the total compensation to be paid by them due to the non-fulfilment by investment
firms of their reimbursement and restitution obligations of the cash and securities deposited by
investors, respectively, before the entry into force of the above mentioned Law 24/2001.
By virtue of the above mentioned Resolution of the Ministry of the Economy, the percentage
distribution of compensation payable to affected investors between the Investment Guarantee
General Fund and the Deposit Guarantee Funds has been established as follows:
7
• Deposit Guarantee Fund for Banking Establishments ...............................53.98%
• Deposit Guarantee Fund for Savings Banks ....................................................40.90%
• Deposit Guarantee Fund for Credit Cooperative Banks ............................ 4.95%
• Investment Guarantee General Fund ................................................................ 0.17%
The Management of the Investment Guarantee General Fund has estimated the total amount of
compensation in €79.7 million. Approximately €32.6 million of this figure shall be payable by the
FGDEB. This financial year € 22.8 million have been paid, totalling €26.6 million from the beginning.
Integrated entities and contributions
6. At the beginning of the year there were 46 entities adhered to the FGDCA. A list of the adhered
entities was published in the Spanish State Official Gazette (issue 650) on April 3, 2010, as required by
Royal Decree 2606/1996.
During 2010 there has been discharged 14 entities which has been integrated in 5 new saving banks,
one saving bank has been discharged through a merger with a banking establishment and 3 saving
banks that have been integrated into the FGDCA.
At December 2010, 43 entities were integrated.
7. The Order EHA/3515/2009, of December 29, published on December 31, 2009, established the
contributions to be made to the FGDCA by the adhered entities. These contributions were fixed at
1.00‰ of the calculation basis established in articles 3 and 4 of Royal Decree 2606/1996, as
amended by the Order ECO/317/2002, on investor compensation schemes. The contributions made
by the adhered entities, which were paid on February 26, 2010, amounted to €513,752.5 thousand
(€199,362 thousand at 2009).
Of the total amount paid in, 99% corresponds to guaranteed deposits and 1% to guaranteed
transferable securities and financial instruments.
Banco de España, according to the legal framework in force, does not have to make contributions.
Guaranteed deposits and coverage ratio
9. Royal Decree 628/2010, of may 14th, was published on June 2nd, 2010, modifying both Royal
Decree 2606/1996, of December 20th, with respect to deposit guarantee funds in credit entities, and
Royal Decree 948/2001, of August 3rd, regarding investor compensation systems, establishing a
maximum guaranteed deposit amount of €100,000 apart from any securities and other financial
instruments that investors may have entrusted the credit entity, which will also be guaranteed up to a
limit of €100,000.
8
9. The evolution of aggregate guaranteed deposits in the last years has been as follows, Euros in
million:
Year Deposit and
securities insured
Calculation bases of
contributions
Deposit and
securities covered % coverage
31.12.1990 85,649.5 85,649.5 58,810.2 68.7
31.12.1991 101,459.0 101,459.0 63,199.5 62.3
31.12.1992 111,954.1 111,954.1 63,929.3 57.1
31.12.1993 127,156.4 127,156.4 69,352.7 54.5
31.12.1994 138,998.8 138,998.8 71,806.4 51.7
31.12.1995 148,832.1 148,832.1 74,942.6 50.3
31.12.1996 152,778.9 152,778.9 93,501.0 61.2
31.12.1997 156,200.6 156,200.6 95,732.1 61.3
31.12.1998 169,593.2 169,593.2 100,133.0 59.0
31.12.1999 194,031.5 194,031.5 110,263.9 56.8
31.12.2000 216,995.9 216,995.9 132,774.7 61.2
31.12.2001 302,374.8 246,435.8 173,720.1 57.4
31.12.2002 323,973.3 266,954.3 179,172.0 55.3
31.12.2003 355,666.8 296,359.1 189,014.0 53.1
31.12.2004 382,991.4 324,009.5 199,799.6 52.2
31.12.2005 427,512.6 364,783.7 214,951.7 50.3
31.12.2006 511,880.2 422,394.6 227,663.2 44.5
31.12.2007 571,918.2 468,296.3 241,345.4 42.2
31.12.2008 577,847.1 498,405.2 409,421.2 70.8
31.12.2009 616,611.6 513,752.5 425,087.8 68.9
31.12.2010 581,172.9 501,754.8 425,385.4 73.2
From December 31, 2001, the financial cover of the FGDCA includes also the transferable securities
and financial instruments. The calculation base includes the total amount of cash deposits and the
5% of the value of transferable securities and financial instruments. On December 31, 2010,
guaranteed cash and securities deposits increased over the previous year (5.7%).
As a result of the measures related to the CCM Action Plan, at 31 December 2010, FGDCA does not
have an uncommitted equity fund (at 31 December 2009 this fund amounted to 0.35% of the
contribution calculation base).
Assets derived from financial restructuring
10. Since the date of acquisition of the assets, the following divestments have taken place (in
thousand euro):
Asset Directly owned by FGDCA
Shareholdings .............................................................................................. 6,017.7
Buildings ......................................................................................................... 12.0
Total ..................................................................................................... 6,029.7
9
Financial position
11. Available financial resources have been reduced in €2,501,726.5 thousand during the year, due
to expenditure made during the implementation of the Action Plan for CCM; however it is worth
noting that €513,752.5 thousand were cashed up from contributions of the adhered entities and
€74,317.2 thousand from asset management, primarily financial interests. The mentioned financial
resources were invested in public debt, in accordance to article 3.7 of Royal Decree 2606/1996 that
obliges to invest the not comprise equity in public debt or other related assets of low risk and high
liquidity.
At year-end, the distribution of financial investments is 24% for Treasury bills and 76% for
Government bonds. The weighted average maturity is 1.6 years.
At 31 December 2010 liquid investments are €700,596.6 thousand less than liabilities although, on
the basis of maturities, their settlement is assured by the contributions of the entities in the next
few years even if no assets are realised of those other on FGDCA's balance sheet.
Surplus for the year and equity
12. The year 2010 ended with a deficit of €2,393,603.7 thousand (surplus of €324,246.8 thousand in
2009). A breakdown is as follows (in thousand euro):
Items Operating Investing Exceptional Total
Income ........................................................... 513,764.3 76,114.2 -- 589,878.5
Expenses ........................................................ (893.8) (28,976.4) -- (29,870.2)
Gain on disposal of investments .................... -- 14,390.1 -- 14,390.1
Write-down costs CCM .................................. -- (2,925,115.2) (2,925,115.2)
Impairment holding in FROB .......................... -- -- (42,886.9) (42,886.9)
Total ........................................................... 512,870.5 61,527.9 (2,968,002.1) (2,393,603.7)
As mentioned at the start of this Report, in 2010 the Action Plan was implemented in order to restore
CCM’s financial position at an estimated cost of €2,925,115.2 thousand.
Part of the income is composed of contributions for €513,752.50 thousand, having increased by
€314,390.50 thousand, with respect to the previous year, the origin of such change being the
increase in the percentage of the contributions, having risen from 0.4 per thousand to 1 per thousand
on the basis of the calculation.
13. Accumulated equity at 31 December amounts to €1,918,195.9 thousand, including the deficit for
2010.
14. On April 26, 2011, the existence of a favourable judicial verdict was communicated by the
managing company of the "Fondo General de Garantía de Inversiones, S.A.". This verdict instructs
10
the administrators of "AVA, Asesores de Valores, AV, SA" to proceed payment to the affected
parties, €4.914,9 thousand of which correspond to FGDCA and were deposited at the
aforementioned date. There is no knowledge of any other subsequent event as at December 31,
2010 nor before the date of this report, that could have a repercussion to the financial statements.
Economic/financial control
Court of Auditors
15. The results of auditing the accounts and contracts in 2009 which have been submitted to the
Spanish Court of Auditors (Tribunal de Cuentas) will be made public in the annual report for that
year.
External audit
16. The 2010 audit report prepared by PricewaterhouseCoopers Auditores, SL, is attached
Management Committee
17. During 2010 Mr Rodrigo de Rato Figaredo was appointed a Permanent Director while Mr Miguel
Blesa de la Parra and Mr José Ramón Quintás Seoane resigned. Similarly, Mr José Antonio Olavarrieta
Arcos was relieved of his duties as a substitute member and appointed a Permanent Director while
Mr José Manuel Espinosa Herrero was appointed a substitute member.
11
ANNUAL ACCOUNTS MANAGEMENT RESPONSIBILITY FOR FINANCIAL REPORTING The accompanying annual accounts of the Deposit Guarantee Fund for Savings Banks and the
information related thereto in this Annual Report are the responsibility of its Management
Committee. The annual accounts have been prepared by the Fund’s Management Company
(Sociedad Gestora de los Fondos de Garantía de Depósitos en Entidades de Crédito, A.I.E.), in
accordance with generally accepted accounting standards applied in Spain.
The financial information presented elsewhere is consistent with that contained in the annual
accounts.
Under the article 2.º - 4 b) of Royal Decree 2606/1996, of December 20, the Management
Committee is competent to approve the accounts that the Deposit Guarantee Fund for Banking
Establishments must submit each year to their members and to Banco de España.
In fulfillment of those rules, the submitted Annual Report together with the annual accounts, offer
information about the activities performed in 2010, the equity and the financial situation of the
Deposit Guarantee Fund for Savings Banks, the results of its management and the source and
allocation of funds for the year 2010, information that is enlarged with data regarding previous
exercises.
These annual accounts have been audited by PricewaterhouseCoopers Auditores, S.L., and the
report is included herein.
12
DEPOSIT GUARANTEE FUND FOR SAVINGS BANKS
BALANCE SHEET
(Thousands of euros)
ASSETS 2010 2009
NON CURRENT ASSETS
Long term investments ......................................................... 1,720,550.4 1,270,996.6
Financial investments (related companies) .......................... 1,720,550.4 1,270,996.6
Long term financial investments .......................................... 1,601,164.5 2,729,436.2
EPA reimbursement rights (net) ............................................. 854,000.0 --
Others assets deriving from Action Plan CCM ........................ 253,821.3 --
Goverment bonds .................................................................. 490,830.2 1,427,618.6
Term bonds ............................................................................ 2,088.2 1,814.0
Other financial assets ............................................................. 424.8 3.6
Preference shares ................................................................... -- 1,300,000.0
Total non current assets ................................................... 3,321,714.9 4,000,432.8
CURRENT ASSETS
Real state ............................................................................. 0.3 0.4
Accounts receivable ............................................................. 1,631.2 37.2
Short term financial investments ......................................... 253,449.7 366,648.5
Treasury bills .......................................................................... 145,404.1 138,640.9
Government bonds ................................................................ -- 197,873.8
Interest receivable on financial investments ......................... 13,133.9 30,133.8
Investment collective institutions shares ............................... 94,911.7 --
Cash and others liquid assets ............................................... 74,079.0 10,381.6
Total current assets .......................................................... 329,160.2 377,067.7
TOTAL ASSETS .................................................................. 3,650,875.1 4,377,500.5
13
DEPOSIT GUARANTEE FUND FOR SAVINGS BANKS
BALANCE SHEET
(Thousands of euros)
FUND BALANCE AND LIABILITIES 2010 2009
FUND BALANCE
Retained earnings .................................................................. 4,295,766.6 3,971,519.8
Surplus (Deficit) of the year ................................................... (2,393,603.7) 324,246.8
Unrealized gains on available-for-sale investment ................ 16,033.0 72,192.5
Total fund balance .......................................................... 1,918,195.9 4,367,959.1
NON CURRENT LIABILITIES
Long term provisions ............................................................ 430,437.8 6,022.5
Related companies creditors ................................................. 222,473.1 --
Asset management creditors ................................................. 81,415.1 --
EPA successfully commission creditors .................................. 120,549.9 --
Indemnities for legal prescription .......................................... 5,999.7 6,022.5
Long term creditors .............................................................. 743,233.0 --
EPA outstanding disbursements ............................................ 743,233.0 --
Total non current liabilities .............................................. 1,173,670.8 6,022.5
CURRENT LIABILITIES
Short term creditors
EPA outstanding disbursements ............................................ 506,202.0 --
Short term creditors ............................................................... 52,806.4 3,519.0
Total current liabilities ..................................................... 559,008.4 3,519.0
TOTAL LIABILITIES ............................................................ 1,732,679.2 9,541.5
TOTAL FUND BALANCE AND LIABILITIES ........................... 3,650,875.1 4,377,500.6
14
DEPOSIT GUARANTEE FUND FOR SAVINGS BANKS
PROFIT AND LOSS ACCOUNT
(Thousands of euros)
2010 2009
OPERATING ACTIVITIES
Contributions ................................................................... 513,752.5 199,362.0
- Annual contributions .......................................................... 513,752.5 199,362.0
Operating expenses .......................................................... (893.8) (811.4)
Gains / Loses on disposal of tangible assets ....................... 11.9 --
Excepcional expenses ........................................................ -- (3,393.2)
Operating results .......................................................... 512,870.6 195,157.4
INVESTING ACTIVITIES
Financial income ............................................................... 76,114.2 103,739.8
- Interest on Treasury bills .................................................... 3,042.9 20,196.8
- Interest on government bonds ........................................... 54,562.3 83,036.2
- Dividends income from associates ...................................... 3,085.6 --
- Interests charged to related companies .............................. 14,987.8 --
- Interests charged to third parties ........................................ 153.3 --
- Adjustments valuation of term bonds ................................. 274.3 497.1
- Other financial income ....................................................... 8.0 9.7
Financial expenses ............................................................. (28,976.5) --
Gains on sales of financial investments ............................ 14,390.1 25,349.6
- Treasury bills ...................................................................... (72.4) 7,687.7
- Government bonds ............................................................ 14,462.5 17,661.9
Investing results ........................................................... 61,527.8 129,089.4
Surplus from activities .................................................. 574,398.4 324,246.8
Impairment FROB investment ........................................... (42,886.9) --
Resolution costs ............................................................... (2,925,115.2) --
(DÉFICIT ) SURPLUS OF THE YEAR................................... (2,393,603.7) 324,246.8
15
DEPOSIT GUARANTEE FUND FOR SAVINGS BANKS
STATEMENT OF RECOGNISED INCOMES AND EXPENSES
On 2010 and 2009, there were no income or expense entries that have been recognized directly on
net equity, other than those on the Income Statement and the unrealized gains on available for sale
investment.
STATEMENT OF CHANGES IN EQUITY (Thousands of euros)
Items 2010 2009
Fund balance - Beginning .................................................... 4,367,959.1 3,971,519.8
Annual contributions ........................................................... 513,752.5 199,362.0
Operating expenses .............................................................. (893.8) (811.4)
Excepcional expenses .......................................................... -- (3,393.2)
Financial results ................................................................... 61,527.8 129,089.4
Gains from real state ........................................................... 11.9 --
Impairment FROB investment .............................................. (42,886.9) --
Resolution costs .................................................................... (2,925,115.2) --
(Deficit) Surplus of the year ................................................ (2,393,603.7) 324,246.8
Gains / Losses on disposal of tangible assets ..................... (56,159.5) 72,192.5
Increase (Decrease) in equity .............................................. (2,449,763.2) 396,439.3
Fund balance - Ending ......................................................... 1,918,195.9 4,367,959.1
16
DEPOSIT GUARANTEE FUND FOR SAVINGS BANKS
CASH FLOW STATEMENT (Thousands of euros)
Indirect Method
2010 2009
Profit or loss for the year(+/-).................................................. (2.393.603,7) 324.246,8
Adjustment to achieve cash flow from operating activities(+/-) 2.457.716,5 63.742,1
Losses (net) by assets impairment (+/-) .................................... 2.043.930,3 --
Provisioning risk expense (net)(+/-) .......................................... 424.415,3 (497,0)
Profit / Losses by sales of non-financial assets (+/-) ................. (10.629,1) 60.846,9
Surplus of annual contributions ................................................ -- 3.392,2
Net increase (decrease) on operating liabilities (+/-) .............. 558.689,2 (43,0)
Other operating liabilities (+/-) .................................................. 558.689,2 (43,0)
Cash provided by operating activities ................................. 622.802,0 387,945.9
INVESTING ACTIVITIES
Financial disinvestments ........................................................... 1,558,881.2 4,437,651.0
Financial investments ................................................................ (579,761.5) (2,252,490.0)
Purchase of Financial assets - CCM ............................................ (1,066,287.2) --
EPA first contribution................................................................. (1,240,000.0) --
Advances and loans made to CCM ............................................ (700,000.0) --
Contribution to Fundación CCM ............................................... (595,586.4) --
Amortization of preferential participations- CCM ..................... 1,300,000.0 --
Receipts from the repayment of loans made to CCM ............... 700,000.0
Contribution made to the FROB ................................................ -- (1,270,663.6)
Subscription of preference participations CCM ........................ -- (1,300,000.0)
Cash used by investing activities ........................................ (622,753.9) (385,502.6)
Net increase (decrease) in cash or equivalents ................... 48.1 2,443.3
Cash or cash equivalents at the beginning of the year (+/-) 3.381,7 938,4
Cash or cash equivalents at the end of the year (+/-) ......... 3.429,8 3.381,7
17
DEPOSIT GUARANTEE FUND FOR SAVINGS BANKS
CASH FLOW STATEMENT (Thousands of euros)
Direct Method
2010 2009
OPERATING ACTIVITIES
Annual contributions............................................................................ 513,752.5 199,362.0
Financial income .................................................................................. 86,241.7 189,439.8
Operating expenses ............................................................................. (893.8) (828.9)
Surplus of annual contributions ........................................................... (3,479.4) --
Other items (net) ................................................................................. (28.8) (27.0)
Receipts from sales of assets ................................................................ 6,349.6 --
Cash provided by operating activities .......................................... 601,941.8 387,945.9
INVESTING ACTIVITIES
Financial disinvestments ...................................................................... 5,734,517.5 4,437,651.0
Financial investments........................................................................... (4,734,537.6) (2,252,490.0)
Purchase of financial assets - CCM ....................................................... (1,066,287.2) --
EPA first contribution ........................................................................... (1,240,000.0) --
Advances and loans made to CCM ...................................................... (700,000.0) --
Contribution to Fundación CCM ........................................................... (595,586.4) --
Amortization of preferential participations- CCM ................................ 1,300,000.0 --
Receipts from the repayment of loans made to CCM ............... 700,000.0
Contribution made to the FROB ........................................................... -- (1,270,663.6)
Subscription of preference participations CCM ................................ -- (1,300,000.0)
Cash used by investing activities .................................................. (601,893.7) (385,502.6)
Net increase (decrease) in cash or equivalents ............................ 48.1 2,443.3
18
INDEPENDENT AUDITORS’ REPORT
19
Independent auditors’ Report
(Translation from the original in Spanish)
To the Management Committee of the Fondo de Garantía de Depósitos en Cajas de Ahorro at the request of the Management of Sociedad Gestora de los Fondos de Garantía de Depósitos en Entidades de Crédito, A.I.E., 1. We have audited the annual accounts of Fondo de Garantía de Depósitos en Cajas de Ahorro. consisting of the balance sheet at 31 December 2010, the income statement, the statement of changes in equity, the cash flow statement and the notes to the annual accounts for the year then ended. The Management of Sociedad Gestora de los Fondos de Garantía de Depósitos en Entidades de Crédito, A.I.E. is responsible for the preparation of the annual accounts of Fondo de Garantía de Depósitos en Cajas de Ahorro, in accordance with the financial reporting framework applicable to the entity (as identified in Note 2 of the accompanying annual accounts) and in particular, with the accounting principles and criteria included therein. Our responsibility is to express an opinion on the aforementioned annual accounts, taken as a whole, based on the work performed in accordance with legislation governing the audit practice in Spain, which requires the examination, on a test basis, of evidence supporting the annual accounts and an evaluation of whether their overall presentation, the accounting principles and criteria applied and the estimates made are in accordance with the applicable financial reporting framework. 2. In our opinion, the accompanying annual accounts for 2010 present fairly, in all material respects, the financial position of Fondo de Garantía de Depósitos en Cajas de Ahorro at 31 December 2010, and the results of its operations and cash flows for the year ended in accordance with the applicable financial reporting framework and in particular, with the accounting principles and criteria included therein. 3. Without it affecting our audit opinion, we call attention to Note 6 to the accompanying annual accounts, which indicates that at 3 November 2009 the Bank of Spain’s Executive Committee and the Management Committee of Fondo de Garantía de Depósitos en Cajas de Ahorro approved the Action Plan approved by Caja Castilla La Mancha for its integration in Caja de Ahorros de Asturias which envisaged certain assistance, following the cancellation of the Spanish Government assistance provided in Royal Decree Law 4/2009 and the provisional assistance granted by the Fund. The Action Plan laid down the delivery of the transferrable assets and liabilities of Caja Castilla La Mancha not included in the banking business and not related to Community Projects to Fondo de Garantía de Depósitos en Cajas de Ahorro. Within this context, assets amounting to €1,693,356.6 have been included in the Fund’s balance sheet, with effect for accounting purposes, 1 January 2010. Similarly, the support envisaged in the Action Plan of Caja Castilla La Mancha, includes the granting of a guarantee covering losses (Asset Protection Arrangement - EPA) for a maximum of €2,475,000.0 thousand for certain banking business exposures, with a five year time limit. Finally, as indicated in Note 24 to the accompanying annual accounts, Fondo de Garantía de Depósitos en Cajas de Ahorro has recorded a loss in the income statement for 2010 due to the above adjustment amounting to €2,925,115.2 thousand. 4. The accompanying directors’ report for 2010 contains the explanations which the management of Sociedad Gestora de los Fondos de Garantía de Depósitos en Entidades de Crédito, A.I.E. considers appropriate regarding the situation of Fondo de Garantía de Depósitos en Cajas de Ahorro, the development of the business and other matters and does not form an integral part of the annual accounts. We have verified that the financial information contained in the aforementioned Directors' Report coincides with that of the annual accounts for 2010. Our work as auditors is limited to checking the Directors' Report within the scope already mentioned in this paragraph and it does not include a review of information other than that obtained from the accounting records of Fondo de Garantía de Depósitos en Cajas de Ahorro. PricewaterhouseCoopers Auditores, S.L. (Signed by) José Ángel Díez Ruiz de Azúa May 16, 2010