Report on Danmarks Nationalbank's Accounts
Danmarks Nationalbank's accounts for 2004 show a profit of kr. 2.8 billion, compared to kr. 3.6 billion in 2003. This change is due primarily to the decline in net income from interest by kr. 0.5 billion, and in value adjustments by kr. 0.4 billion. Transfer of kr. 0.7 billion from the Value Adjustment Reserve to cover the negative value adjustments brings the total amount for distribution to kr. 3.5 billion, of which kr. 0.7 billion is allocated to the General Reserves and kr. 2.8 billion is payable to the central government.
PRESENTATION OF DANMARKS NATIONALBANK'S ACCOUNTS
The accounts for 2004 have been prepared in accordance with the same accounting policies as in the previous year, except for reclassification of a few accounting items, cf. p. 124.
The accounts reflect that Danmarks Nationalbank issues banknotes and coins, administers the foreign-exchange reserve and functions as banker to the banks and mortgage-credit institutes, and to the central government.
The profit from financial items was kr. 3,292 million, which is kr. 895 million lower than in 2003, and the total profit for the year is kr. 2,844 million, i.e. kr. 766 million lower than in 2003.
The balance sheet increased from kr. 323.1 billion to kr. 337.1 billion.
The profit and loss account
Net income from interest
Net income from interest totalled kr. 3,954 million, which is kr. 500 million less than in 2003.
Income from interest on foreign assets fell by kr. 676 million to kr. 5,623 million. The decrease reflects lower interest rates on a virtually unchanged average foreign-exchange reserve.
Net interest to banks and mortgage-credit institutes (interest on deposits and certificates of deposit less interest on monetary-policy lending[1]) was kr. 1,564 million, compared to kr. 1,956 million in 2003. The decline by kr. 392 million is attributable to lower rates of interest and a lower average net position.
Danmarks Nationalbank's interest expenditure on the central government's deposit fell by kr. 53 million to kr. 1,726 million. The discount rate, which is the rate of interest on the deposit, was lower on average in 2004 than in 2003, while the central government's balance on average was kr. 7.4 billion higher.
Interest on domestic bonds fell by kr. 316 million to kr. 1,818 million. The decrease is attributable to lower interest rates.
Value adjustments, etc.
Value adjustments, etc. resulted in a loss of kr. 662 million.
Value adjustment of Danmarks Nationalbank's gold stock gave a loss of kr. 174 million, which is related to a fall in the price of gold converted to Danish kroner.
Value adjustment of foreign-exchange positions[2] resulted in a loss of kr. 562 million, which is due to an exchange-rate loss of kr. 168 million and a market-value loss of kr. 394 million.
The capital gain on domestic securities of kr. 74 million comprises a total market-value loss on domestic bonds of kr. 85 million and a market-value gain on shares of kr. 159 million.
The market-value loss on domestic and foreign bonds can be related primarily to the fact that a large proportion of the bond portfolio at the beginning of the year had a market value above par, and therefore automatically released a capital loss in step with redemption, or because the redemption date was forthcoming.
Other income from ordinary operations
This item comprises reversal of kr. 67 million relating to the guarantee provision made in 1993 in connection with the winding up of VB Finans, as well as revenue of kr. 17 million from the sale of coin sets and medals.
Expenses
Total expenses fell by kr. 29 million to kr. 550 million, equivalent to a decrease by 5 per cent compared to 2003. Staff expenses fell by kr. 12 million to kr. 317 million, and other expenses fell by kr. 17 million to kr. 233 million.
In the period the average number of staff fell from 553 to 533.
Other ordinary expenditure
To mark the wedding of Crown Prince Frederik and Crown Princess Mary on 14 May 2004, a commemorative coin in fine silver was issued, cf. p. 63. As on previous occasions when commemorative coins have been issued to mark special events in the Royal Family, kr. 19 million was disbursed. The amount is distributed equally between the Royal Family and the Ministry of Economic and Business Affairs for charitable purposes.
Profit for the year
The result for the year is a profit of kr. 2,844 million, against a profit of kr. 3,609 million in 2003. Transfer of kr. 662 million from the Value Adjustment Reserve covers the negative value adjustment of the year. The Value Adjustment Reserve hereafter amounts to kr. 2,648 million. An amount of kr. 701 million, corresponding to 20 per cent of the profit excluding value adjustments, is allocated to the General Reserves, after which the General Reserves total kr. 47,336 million. Kr. 2,805 million is payable to the central government, corresponding to 80 per cent of the profit excluding value adjustments.
The balance sheet
Gold
The stock of gold amounted to kr. 5.1 billion at the end of the year, compared to kr. 5.3 billion in 2003. The decrease is related to the decline in the price of gold converted to Danish kroner by 3 per cent during 2004.
Foreign assets
Assets amounted to kr. 208.5 billion at the end of the year, compared to kr. 214.4 billion in 2003. This is equivalent to a decrease of 3 per cent. The assets are placed in euro (80 per cent), dollars (11 per cent), pounds sterling (5 per cent) and Swedish kronor (4 per cent), and the exchange-rate risk is restructured so that the exposure is mainly in euro, cf. p. 110. The positions are held mainly in highly-rated government bonds and government-guaranteed bonds, deposits with central banks and commercial banks, or as lending against collateral in government bonds and government-guaranteed bonds.
Foreign assets are the most significant item of the foreign-exchange reserve, together with gold, claims on the IMF and foreign liabilities.
Claims on the International Monetary Fund (IMF), etc.
This balance-sheet item comprises Denmark's IMF quota less the IMF's outstanding drawing right on Danmarks Nationalbank with addition of Danmarks Nationalbank's holdings of Special Drawing Rights (SDR) in the IMF and loans for the Poverty Reduction and Growth Facility Trust (PRGF). Loans under PRGF are guaranteed by the central government. During the year, this asset decreased by kr. 1.7 billion to kr. 5.7 billion. Of this decrease, kr. 1.5 billion is attributable to the transactions of the IMF and kr. 0.2 billion to foreign-exchange losses.
Monetary-policy lending
Monetary-policy lending is collateralised loans to banks and mortgage-credit institutes. This item increased by kr. 24.6 billion to kr. 72.6 billion.
Other lending
The loans of kr. 3.4 billion almost exclusively comprise lending to banks in connection with decentralised cash depots.
Domestic bonds
The value of domestic bonds fell from kr. 39.7 billion to kr. 37.1 billion. The holdings comprise mortgage-credit bonds (kr. 19.5 billion), government bonds (kr. 15.0 billion) and Danish Ship Finance bonds (kr. 2.6 billion).
Banknotes and coins in circulation
Banknotes in circulation increased by kr. 2.1 billion to kr. 47.0 billion, while coins in circulation increased by kr. 0.3 billion to kr. 5.0 billion. Banknotes in circulation include Faroese banknotes at kr. 369 million. The increase in banknotes and coins in circulation is in line with the tendency seen for a number of years, cf.p. 59.
Monetary-policy deposits
The net deposits of banks and mortgage-credit institutes in current accounts and settlement accounts decreased from kr. 12.8 billion to kr. 6.9 billion, while deposits placed in certificates of deposit rose from kr. 157.3 billion to kr. 160.4 billion.
Other deposits
This item comprises banks' and mortgage-credit institutes' deposits in euro-denominated current accounts and securities settlement accounts totalling kr. 0.3 billion, as well as other deposits of kr. 2.6 billion, of which the account of Danish Ship Finance amounts to kr. 2.1 billion.
Central government
The central-government deposit increased from kr. 44.0 billion to kr. 60.8 billion. The central government's share of the profit of Danmarks Nationalbank is included in this amount.
Foreign liabilities
The liabilities decreased by kr. 1.3 billion to kr. 1.6 billion and comprise krone deposits with Danmarks Nationalbank from supranational institutions and other central banks.
Counterpart of Special Drawing Rights allocated by the IMF (SDR)
The allocation was unchanged during the year, and the adjustment of the item by kr. 0.1 billion to kr. 1.5 billion solely reflects the value adjustment for the year.
Net capital
The net capital amounts to kr. 50,284 million, which is the net capital at the beginning of the year of kr. 50,245 million less negative value adjustments of kr. 662 million with addition of the allocation to the General Reserves of kr. 701 million.
General
Danmarks Nationalbank's Accounts for the year 2004 are presented in accordance with the Danmarks Nationalbank Act and are approximated to the sound accounting policies for European central banks. Unrealised gains on foreign exchange and securities are still recognised in the profit and loss account, however.
With the exception of the changes below, the accounting policies applied are unchanged from the previous year.
RECLASSIFICATIONS AND CHANGES IN PRESENTATION:
Monetary-policy lending and deposits were previously shown together with other accounts under the Lending and Deposits items. To specify which accounts relate to monetary-policy instruments, these will from now on be shown separately under the items Monetary-policy lending (assets side) and Monetary-policy deposits (liabilities side).
Debt and deposits on current accounts and settlement accountswere previously stated at gross value under Lending and Deposits, respectively. Since the net outstandings in these accounts indicate the actual outstandings, it has been decided to state them at net value on the balance sheet. This change has implied a reduction of the balance-sheet total for 2004 by kr. 57.2 billion and for 2003 by kr. 74.2 billion.
The order of the balance-sheet items has been changed as a result of the above.
ACCOUNTING POLICIES:
Income and expensesare recognised in the profit and loss account for the period which they concern. Income and expenses in foreign exchange are converted at the exchange rates prevailing at the time that they are recorded in the accounts.
Premiums and discounts on Treasury bills and certificates of deposit, as well as forward premiums on forward securities and foreign-exchange contracts, as recognised as interest.
Both realised and unrealised gains and losses are recognised in the profit and loss account, with the exception of unrealised gains on fixed assets.
Gold is stated at market value on the balance-sheet date.
Assets and liabilities in foreign exchange, including forward contracts, are entered at the official exchange rates and securities market prices prevailing on the balance-sheet date. Swaps and futures are stated at market value.
Bonds, including forward contracts, are stated at market value at year-end.
Repurchase agreements, etc.Securities sold in connection with repurchase agreements, and gold and securities made available in lending facilities, are included in Danmarks Nationalbank's holdings.
Shares, etc.Marketable shares are stated at market value and the value is adjusted via the profit and loss account.
Capital investments and equivalent investments are stated at acquisition value or market value at year-end, if the latter is assessed to be significantly lower. Write-down to a lower value than the acquisition value is recognised in the profit and loss account if it exceeds previous revaluations of the share. Revaluations are carried directly to net capital.
Tangible fixed assetsare stated at acquisition price less depreciation and amortisation. Assets with an acquisition value of less than kr. 100,000 are recognised as expenditure in the year of acquisition. Depreciation on a linear per-annum basis takes place over the expected useful lives of the assets.
| The useful lives are assessed as follows: | |
| Bank properties | 100 years |
| Other properties | 25-50 years |
| Building improvements | 25 years |
| Technical building facilities | 10-25 years |
| Technical production facilities | 5-10 years |
| Other machinery and equipment | 3-5 years |
PROFIT AND LOSS ACCOUNT FOR THE YEAR 2004
|
Note
|
2004 kr. '000 |
2003 kr. '000 |
||
| Income from interest, etc.: | ||||
| Interest on foreign assets | 5,622,583 | 6,298,610 | ||
| 1 | Interest on domestic loans | 1,728,517 | 1,977,005 | |
| Interest on domestic bonds | 1,818,472 | 2,134,498 | ||
| Commission and other income | 1,950 | 1,947 | ||
| 9,171,522 | 10,412,060 | |||
| Expenditure on interest, etc.: | ||||
| Interest on foreign liabilities | 31,499 | 29,261 | ||
| 2 | Interest on domestic deposits | 5,186,252 | 5,928,810 | |
| 5,217,751 | 5,958,071 | |||
| Net income from interest | 3,953,771 | 4,453,989 | ||
| Value adjustments, etc.: | ||||
| Value adjustment of gold | -173,672 | 103,910 | ||
| 3 | Value adjustment of foreign assets | -562,153 | -37,122 | |
| 4 | Value adjustment of domestic securities | 73,599 | -334,188 | |
| -662,226 | -267,400 | |||
| Profit from financial items | 3,291,545 | 4,186,589 | ||
| Income from shares, etc. | 71,733 | 38,490 | ||
| 5 | Other income from ordinary operations | 83,605 | 2,520 | |
| Expenses: | ||||
| 6 | Staff expenses | 317,353 | 329,226 | |
| 7 | Other expenses | 232,554 | 249,601 | |
| 549,907 | 578,827 | |||
| 8 | Depreciation and write-down of tangible fixed assets | 34,452 | 39,621 | |
| Other ordinary expenditure | 19,000 | - | ||
| Profit for the year | 2,843,524 | 3,609,151 | ||
| Distribution of the profit for the year: | ||||
| Profit for the year | 2,843,524 | 3,609,151 | ||
| Allocation from the Value Adjustment Reserve | 662,226 | 267,400 | ||
| 3,505,750 | 3,876,551 | |||
| allocated as follows: | ||||
| Allocation to the General Reserves, 20 per cent | 701,150 | 775,310 | ||
| Payable to the central government, 80 per cent | 2,804,600 | 3,101,241 | ||
| 3,505,750 | 3,876,551 |
BALANCE SHEET AT 31 DECEMBER 2004
| Note | 2004 kr. '000 |
2003 kr. '000 |
|
| Assets | |||
| 9 | Gold | 5,123,985 | 5,297,673 |
| 10 | Foreign assets | 208,455,625 | 214,440,926 |
| 11 | Claims on the International Monetary Fund (IMF), etc. | 5,683,980 | 7,416,059 |
| Monetary-policy lending | 72,635,000 | 48,024,000 | |
| 12 | Other lending | 3,412,350 | 3,248,468 |
| 13 | Domestic bonds | 37,101,501 | 39,745,673 |
| 14 | Shares, etc. | 630,452 | 457,350 |
| 15 | Tangible fixed assets | 669,589 | 679,769 |
| 16 | Other assets | 3,332,220 | 3,762,280 |
| Accruals | 21,498 | 21,891 | |
| Total assets | 337,066,200 | 323,094,089 | |
| Liabilities | |||
| Banknotes | 47,046,751 | 44,983,531 | |
| Coins | 4,991,867 | 4,701,041 | |
| Monetary-policy deposits | |||
| 17 | Net current accounts | 6,873,495 | 12,764,457 |
| Certificates of deposit | 160,379,000 | 157,279,000 | |
| 18 | Other deposits | 2,820,433 | 4,024,821 |
| Central government | 60,810,198 | 43,981,174 | |
| Foreign liabilities | 1,632,935 | 2,975,521 | |
| Counterpart of Special Drawing Rights | |||
| allocated by the International Monetary Fund (SDR) | 1,513,833 | 1,577,438 | |
| Other liabilities | 714,070 | 562,412 | |
| Total creditors | 286,782,582 | 272,849,395 | |
| General Capital Fund | 50,000 | 50,000 | |
| Statutory Reserves | 250,000 | 250,000 | |
| Value Adjustment Reserve | 2,647,867 | 3,310,093 | |
| General Reserves | 47,335,751 | 46,634,601 | |
| 19 | Total net capital | 50,283,618 | 50,244,694 |
| Total liabilities | 337,066,200 | 323,094,089 | |
| Off-balance-sheet items: | |||
| 20 | Guarantees | 169,868 | 180,098 |
| 21 | Other liabilities | 54,331,073 | 56,193,131 |
| 54,500,941 | 56,373,229 |
NOTES TO THE ACCOUNTS FOR 2004
| Note | 2004 kr. '000 |
2003 kr. '000 |
|
| 1 | Interest on domestic loans | ||
| Interest on monetary-policy loans (collateralised loans) | 1,715,392 | 1,945,813 | |
| Interest on loans to other borrowers | 13,125 | 31,192 | |
| 1,728,517 | 1,977,005 | ||
| 2 | Interest on domestic deposits | ||
| Interest on current accounts | 131,766 | 141,531 | |
| Interest on certificates of deposit | 3,147,189 | 3,760,261 | |
| Interest on the central government's deposits | 1,726,241 | 1,778,750 | |
| Interest to other depositors, etc. | 181,056 | 248,268 | |
| 5,186,252 | 5,928,810 | ||
| 3 | Value adjustment of foreign assets | ||
| Market-value adjustment | -393,588 | -761,612 | |
| Exchange-rate adjustment | -168,565 | 724,490 | |
| -562,153 | -37,122 | ||
| 4 | Value adjustment of domestic securities | ||
| Value adjustment of domestic bonds | -85,186 | -334,188 | |
| Value adjustment of shares | 158,785 | - | |
| 73,599 | -334,188 | ||
| 5 | Other income from ordinary operations | ||
| Income from sale of coin sets and medals | 16,605 | 2,520 | |
| Reversal of provision for VB Finans | 67,000 | - | |
| 83,605 | 2,520 | ||
| 6 | Staff expenses | ||
| Salaries and remuneration | 250,648 | 244,862 | |
| Other staff expenses | 66,705 | 58,364 | |
| Allocations to support and severance schemes | - | 26,000 | |
| 317,353 | 329,226 | ||
| In 2004 the average number of employees was 533 on a full-time basis (2003: 553) | |||
| 7 | Other expenses | ||
| Materials for banknote production | 23,703 | 31,960 | |
| Materials for coin production | 27,927 | 9,675 | |
| Real property, current expenses | 99,353 | 108,438 | |
| Data processing, etc. | 30,907 | 35,461 | |
| Minor acquisitions and maintenance of machinery and equipment | 9,635 | 15,488 | |
| Other expenses | 50,834 | 48,579 | |
| Reimbursement of previously paid VAT on canteen services | -9,805 | - | |
| 232,554 | 249,601 | ||
| 8 | Depreciation and write-down of tangible fixed assets | ||
| Properties | 10,142 | 9,831 | |
| Operating equipment | 24,310 | 29,790 | |
| 34,452 | 39,621 | ||
| 9 | Gold | ||
| The gold stock amounts to 66,550 kg (2003: 66,550 kg) | |||
| 10 | Foreign assets | ||
| Foreign bonds | 63,351,323 | 80,081,259 | |
| Claims on central banks | 2,199,754 | 1,678,221 | |
| Claims on foreign commercial banks | 31,518,348 | 29,927,331 | |
| Repo transactions against collateral in foreign bonds | 111,385,548 | 102,753,593 | |
| Other foreign assets | 652 | 522 | |
| 208,455,625 | 214,440,926 | ||
| 11 | Claims on the International Monetary Fund (IMF), etc. | ||
| Denmark's IMF quota | 13,904,002 | 14,488,182 | |
| The IMF's holdings of Danish kroner | 9,309,853 | 8,435,378 | |
| Reserve position with the IMF | 4,594,149 | 6,052,804 | |
| Holdings of Special Drawing Rights (SDR) | 243,471 | 481,335 | |
| 4,837,620 | 6,534,139 | ||
| Loans for the Poverty Reduction and Growth Facility Trust (guaranteed by the central government) | 846,360 | 881,920 | |
| 5,683,980 | 7,416,059 | ||
| 12 | Other lending | ||
| Banks and mortgage-credit institutes | 3,371,367 | 3,122,555 | |
| Other loans | 40,983 | 125,913 | |
| 3,412,350 | 3,248,468 | ||
| 13 | Domestic bonds | ||
| Danish government bonds | 14,984,496 | 16,643,121 | |
| Other domestic bonds | 22,117,005 | 23,102,552 | |
| 37,101,501 | 39,745,673 | ||
| 14 | Shares, etc. | ||
| Marketable shares | 178,744 | - | |
| Capital investments and equivalent investments | 451,708 | 457,350 | |
| 630,452 | 457,350 | ||
| The market value of unlisted marketable shares is stated at 80 per cent of the OTC price at 31 December 2004. | |||
| Danmarks Nationalbank's holdings of capital investments and equivalent investments at 31 December 2004 have an estimated market value of kr. 1,536 million. These holdings comprise capital subscription to the ECB and shares in the Bank for International Settlements (BIS), SWIFT, PBS Holding, VP Securities Services, SAS and Exhibition Centre Herning. | |||
| 15 | Tangible fixed assets | ||
| Properties | 568,809 | 576,932 | |
| Machinery and equipment | 83,521 | 95,448 | |
| Work in progress | 17,259 | 7,389 | |
| 669,589 | 679,769 | ||
| At the most recent official assessment Danmarks Nationalbank's properties were valued at kr. 941 million. | |||
| 16 | Other assets | ||
| The amount includes outstanding interest of kr. 1,917 million (2003: kr. 2,063 million) | |||
| 17 | Net current accounts | ||
| Deposits in current accounts and settlement accounts | 63,296,195 | 86,240,977 | |
| Drawing on current accounts | 56,422,700 | 73,476,520 | |
| 6,873,495 | 12,764,457 | ||
| At 31 December 2004 Danmarks Nationalbank acts as full guarantor to VP Securities Services for kr. 30.3 billion (2003: kr. 44.8 billion) and to the Danish Bankers Association (Sumclearing) for kr. 31.4 billion (2003: kr. 39.4 billion) in connection with the banks and mortgage-credit institutes' payment settlements with 3 January 2005 as the value date. | |||
| 18 | Other deposits | ||
| Banks and mortgage-credit institutes | 255,234 | 180,242 | |
| Other depositors | 2,565,199 | 3,844,579 | |
| 2,820,433 | 4,024,821 |
|
General
Capital Fund and Statutory Fund |
Value
Adjustment Reserve |
General
Reserves |
Total
|
||
| kr. '000 | kr. '000 | kr. '000 | kr. '000 | ||
| 19 | Total net capital | ||||
| Net capital 1 January 2004 | 300,000 | 3,310,093 | 46,634,601 | 50,244,694 | |
| Carried forward from the profit for the year | - | -662,226 | 701,150 | 38,924 | |
| 300,000 | 2,647,867 | 47,335,751 | 50,283,618 |
| Note | 2004 1,000 kr |
2003 1,000 kr, |
|
| 20 | Guarantees | ||
| VP Securities Services, share of Guarantee Capital | 72,523 | 79,614 | |
| VP Securities Services, guarantee for errors by other account-holding institutions | 33,315 | 36,454 | |
| Danish Ship Finance, share of Guarantee Capital | 63,000 | 63,000 | |
| Other guarantees | 1,030 | 1,030 | |
| 169,868 | 180,098 | ||
| Moreover the Bank has provided a guarantee for the obligations of Danmarks Nationalbank's Pension Fund subject to winding-up. | |||
| 21 | Other liabilities | ||
| Forward purchases of foreign exchange | 48,428,687 | 49,202,977 | |
| Market value of assets in currency swap agreements | 2,681,491 | 3,508,771 | |
| Forward purchases of securities | - | 34,109 | |
| Futures | 114,663 | 210,533 | |
| Unutilised portion of credit facilities made available to the IMF (SDR) | 3,106,232 | 3,236,741 | |
| 54,331,073 | 56,193,131 | ||
|
Moreover, the Bank has established intervention agreements with the ECB, and in addition an undertaking of support has been given to former employees. The undertaking of support is fully covered by a pension insurance company.
|
SIGNATURES AND AUDIT REPORTS
Danmarks Nationalbank
Copenhagen, 22 February 2005
|
Bodil Nyboe Andersen |
Torben Nielsen |
Jens Thomsen |
/Henrik Larsen, Chief Accountant |
Internal Auditor's Report
I have audited the Accounts of Danmarks Nationalbank for the financial year 1 January-31 December 2004, pp. 117-134, which are submitted in accordance with the Danmarks Nationalbank Act.
The Accounts are the responsibility of Danmarks Nationalbank's Committee of Directors and Board of Directors. My responsibility is to express an opinion on the Accounts based on my audit.
Basis of opinion
I have conducted the audit in accordance with Danish Standards on Auditing. Those standards require that I plan and perform the audit to obtain reasonable assurance that the Accounts are free of material misstatement.
The audit included examining, on a test basis, evidence supporting the amounts and other information disclosed in the Accounts. The audit also included assessing the accounting policies applied and the significant estimates made by the Committee of Directors and the Board of Directors. I believe that the audit performed provides sufficient basis for my opinion.
My audit has not resulted in any qualification.
Opinion
In my opinion, the Accounts give a true and fair view of Danmarks Nationalbank's assets, liabilities and financial position at 31 December 2004, and of the result of Danmarks Nationalbank's activities for the financial year 1 January-31 December 2004, in accordance with the Danmarks Nationalbank Act.
Copenhagen, 22 February 2005
Jan Birkedal, Chief Auditor
External Auditors' Report
As auditors appointed by the Minister of Economic and Business Affairs we have audited the Accounts of Danmarks Nationalbank for the financial year 1 January-31 December 2004, pp. 117-134, which are submitted in accordance with the Danmarks Nationalbank Act.
The Accounts are the responsibility of Danmarks Nationalbank's Committee of Directors and Board of Directors. Our responsibility is to express an opinion on the Accounts based on our audit.
Basis of opinion
We have conducted our audit in accordance with Danish Standards on Auditing. Those standards require that we plan and perform the audit to obtain reasonable assurance that the Accounts are free of material misstatement.
The audit included examining, on a test basis, evidence supporting the amounts and other information disclosed in the Accounts. The audit also included assessing the accounting policies applied and the significant estimates made by the Committee of Directors and the Board of Directors. We believe that the audit performed provides sufficient basis for our opinion.
Our audit has not resulted in any qualification.
Opinion
In our opinion, the Accounts give a true and fair view of Danmarks Nationalbank's assets, liabilities and financial position at 31 December 2004, and of the result of Danmarks Nationalbank's activities for the financial year 1 January-31 December 2004, in accordance with the Danmarks Nationalbank Act.
Copenhagen, 22 February 2005
Svend Ørjan Jensen, State-Authorised Public Accountant
Bjarne Fabienke, State-Authorised Public Accountant
These Accounts, audited in the manner prescribed by the by-laws of Danmarks Nationalbank, are hereby adopted by the Board of Directors.
Copenhagen, 15 March 2005
Hans E. Zeuthen Helle Bechgaard Michael Dithmer
Elisabeth Arnold Søren Bjerre-Nielsen Niels Boserup Pia Christmas-Møller
Kristian Thulesen Dahl Niels Fog Pia Gjellerup Pernille Blach Hansen
Svend Erik Hovmand Johannes Fløystrup Jensen Knud Koch Jensen Niels Due Jensen
Jette W. Knudsen Kjeld Larsen Michael Lunn Holger K. Nielsen Kirsten Nielsen
Kirsten Nissen Jens Rohde Jens Rostrup-Nielsen Kirsten Stallknecht
Finn Thorgrimson
[1] The rates of interest for loans and certificates of deposit are identical, while the rate of interest for deposits has been lower than the other interest rates.
[2] Foreign-exchange positions comprise the foreign-exchange reserve, as well as unsettled foreign-exchange contracts, currency and interest-rate swaps, domestic foreign-exchange balances, and the liability counterpart of Special Drawing Rights (SDR) allocated by the IMF.