Notes to the consolidated balance sheet: liabilities

Debt securities include all non-subordinated debt, not identified as debentures or other notes payable to banks. Debt securities do not include savings deposits.

Debt securities consist of loans and deposits raised in the international capital market from professional counterparties. The movements of debt securities are summarized as follows:

The following table summarizes the carrying value of the debt securities.

The nominal amounts of the debt securities are as follows:

Debentures and notes consist of medium-term notes under the GMTN program and public issues in the Swiss franc (CHF) public market, the Japanese yen (JPY) Samurai market, the Australian dollar (AUD) market, and the Canadian dollar (CAD) market. The movements can be summarized as follows:

The following table summarizes the carrying value of the debentures and notes.

The nominal amounts of the debentures and notes are as follows:

The amounts recognized in the balance sheet are as follows.

Pension schemes

FMO has established a number of pension schemes covering all its employees. Most of the pension schemes are average salary-defined benefit plans. FMO has outsourced the management of the pension assets to an asset manager. FMO has agreed strict guidelines with the asset manager. The assets of the funded plans are held independently of FMO's assets by the insurance company in separately administered funds. Independent actuaries value the schemes every year using the projected unit credit method. The latest actuarial valuations were carried out as per December 31, 2011.

The amounts recognized in the balance sheet are as follows:

The movements in the fair value of plan assets can be summarized as follows:

Determination of expected return on assets

An important element for financial reporting is the assumption for return on assets (ROA). The ROA is updated at least annually, taking into consideration the pension plan's asset allocation, historical returns on the types of assets held in the fund and the current economic environment. Based on these factors, it is expected that the fund's assets will earn an average percentage per year over the long term. This estimate takes into account a deduction for administrative expenses and investment manager's fees paid from the fund. For estimation purposes, it is assumed the long-term asset mix will be consistent with the current mix. Changes in the asset mix could impact the amount of recorded pension income or expense, the funded status of the plan, and the need for future cash contributions. The actual return on plan assets was 14.4% (2010: 14.3%).

The categories of the plan assets can be summarized as follows:

The movements in the present value of the defined benefit obligations can be summarized as follows:

The amounts recognized in the profit and loss account as net periodic pension cost are as follows:

The movement in the liability recognized in the balance sheet is as follows:

The principal assumptions used for the purpose of the actuarial valuations at year-end were as follows:

The assumption for future pension increases is based on all pension schemes included in FMO's pension liability.

Other provisions

The other provisions are provisions for severance arrangements. This provision is determined using present value calculations.

Share capital

The authorized capital amounts to €45,380, consisting of 51% A shares of €22.69 each, which can only be held by the State, and 49% B shares, also of €22.69 each, which can be held by private investors. The voting rights for A shares and B shares are equal. In addition, the equity of the company comprises of three reserves, which result from the Agreement State-FMO of November 16, 1998. These are the share premium reserve, the development fund and the contractual reserve. As long as the company continues its activities, these reserves are not available to the shareholders. Upon liquidation of FMO these reserves fall to the State, after settlement of the contractual return to the shareholders.

Share premium reserve

Other reserves

Dividend distributed in 2011 to shareholders of A shares and B shares was equal and amounted to €4.66 (2010: €3.81) per share.

Contractual reserve

The addition relates to that part of the annual profit that FMO is obliged to reserve under the Agreement State-FMO of November 16, 1998 (see 'other information').

Development fund

This special purpose reserve contains the allocation of risk capital provided by the State to finance the portfolio of loans and equity investments. In 2005, FMO received the final contribution (€37,260) to the development fund under the Agreement State-FMO of November 16, 1998.

Available for sale reserve

Included in the available for sale reserve is an amount of €10,136 (2010: €178) for fair value changes in equity investments that were previously impaired.

Translation reserve

Non-controlling interests