ANNUAL REPORT 2008 - Polymer Bank Notes of the World

NOTE ON PROFIT DISTRIBUTION/ALLOCATION OF LOSSESThis note is not part of the fi nancial statementsof the ECB for the year 2008.INCOME RELATED TO THE ECB’S SHARE OF TOTALBANKNOTES IN CIRCULATIONIn 2007, following a decision by the GoverningCouncil, the full income of €2,004 millionearned on the ECB’s share of total banknotes incirculation was retained to ensure that the ECB’stotal profit distribution for the year did not exceedits net profit for the year. In respect of 2008, anamount of €1,206 million, comprising part ofthe income earned on the ECB’s share of totaleuro banknotes in circulation, was distributed tothe NCBs on 5 January 2009, in proportion totheir paid-up shares in the subscribed capital ofthe ECB.€117 million to the euro area NCBs in proportionto their paid-up capital.Non-euro area NCBs are not entitled to receiveany share of the ECB’s profit.2008 2007€ €Profit for the year 1,322,253,536 0Income on the ECB’s banknoteissue distributed to NCBs (1,205,675,418) 0Profit for the year afterdistribution of income on theECB’s banknote issue 116,578,118 0Distribution of profit to NCBs (116,578,118) 0Total 0 0PROFIT DISTRIBUTION/COVERAGE OF LOSSESPursuant to Article 33 of the Statute of the ESCB,the net profit of the ECB shall be transferred inthe following order:(a) an amount to be determined by the GoverningCouncil, which may not exceed 20% of thenet profit, shall be transferred to the generalreserve fund subject to a limit equal to 100%of the capital; and(b) the remaining net profit shall be distributedto the shareholders of the ECB in proportionto their paid-up shares.In the event of a loss incurred by the ECB, theshortfall may be offset against the generalreserve fund of the ECB and, if necessary,following a decision by the Governing Council,against the monetary income of the relevantfinancial year in proportion and up to theamounts allocated to the NCBs in accordancewith Article 32.5 of the Statute of the ESCB. 1The Governing Council decided on 5 March2009 to make no transfer to the general reservefund and to distribute the remaining balance of1Under Article 32.5 of the Statute of the ESCB, the sum of theNCBs’ monetary income shall be allocated to the NCBs inproportion to their paid-up shares in the capital of the ECB.ECBAnnual Report2008241