Financial Statements 2011 - Investing In Africa

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Notes To The Financial Statements (Continued) As at 31 december 2011 36) Non-controlling interestst (continued) a) NIC Bank Tanzania (continued) Movement in non-controlling interests; 2011 2010 Shs’000 Shs’000 At 1 January 382,299 336,849 Share of profit 53,689 45,450 At 31 December 435,988 382,299 b) NIC Securities On 31 December 2007, the Bank acquired 57.7% of NIC Securities Limited (formerly Solid Investment Securities Limited) through its wholly owned subsidiary NIC Capital Limited. Through combinations of direct buy-outs and additional rights issues, the Group increased its ownership stake in the subsidiary to 91.3% in 2009. Movement in non-controlling interest; 2011 2010 Shs’000 Shs’000 At 1 January 32,168 30,929 Share of profit 990 1,239 At 31 December 33,158 32,168 37) Off balance sheet financial instruments, contingent liabilities and commitments a) Contingent liabilities Bank Group 2011 2010 2011 2010 Shs’000 Shs’000 Shs’000 Shs’000 5,289,500 3,763,662 Letters of credit 5,301,250 3,776,587 7,896,163 6,818,173 Letters of guarantee & performance bonds 8,175,203 6,981,496 13,185,663 10,581,835 At 31 December 13,476,453 10,758,083 In the ordinary course of business, the Group conducts business involving acceptances, letters of credit, guarantees, performance bonds and indemnities. The majority of these facilities are offset by corresponding obligations of third parties. In addition, there are other off-balance sheet financial instruments including forward contracts for purchase and sale of foreign currencies, the nominal amounts of which are not reflected in the statement of financial position. Letters of credit are commitments by the Group to make payments to third parties, on production of documents, on behalf of customers and are reimbursed by customers. Letters of guarantee and performance bonds are issued by the Bank, on behalf of customers, to guarantee performance by customers to third parties. The Group will only be required to meet these obligations in the event of default by the customers. (b) Operating lease prepayments i) The Group as a lessor At the end of the reporting period, the Group had contracted with tenants for the following future lease receivables: 88 • NIC Bank Limited • Annual Report & Financial Statements 2011
Notes To The Financial Statements (Continued) As at 31 december 2011 37) Off balance sheet financial instruments, contingent liabilities and commitments (continued) (b) Operating lease prepayments (continued) Bank Group 2011 2010 2011 2010 Shs’000 Shs’000 Shs’000 Shs’000 2,526 - Within one year 2,526 - 10,103 4,014 In the second to fifth year inclusive 10,103 4,014 12,629 4,014 At 31 December 12,629 4,014 Leases are negotiated for an average term of 6 years and rentals are reviewed every two years. The leases are cancellable with a penalty when the tenants do not give three months notice to vacate the premises. ii) The Group as a lessee At the end of the reporting period, the Group had non-cancellable operating leases which fall due as follows: Bank Group 2011 2010 2011 2010 Shs’000 Shs’000 Shs’000 Shs’000 Premises 106,145 45,024 Within one year 132,303 58,749 325,294 132,190 In the second to fifth year inclusive 413,484 185,747 431,439 177,214 At 31 December 545,787 244,496 Office equipment 1,348 1,348 Within one year 1,348 1,348 - 1,348 In the second to fifth year inclusive - 1,348 1,348 2,696 At 31 December 1,348 2,696 Operating lease payments represent rentals payable by the Group for its office premises and office equipment. Premises leases are negotiated for an average term of 6 years, while office equipment is for an average term of 3 years. c) Capital commitments Bank Group 2011 2010 2011 2010 Shs’000 Shs’000 Shs’000 Shs’000 852,668 24,734 Authorised and contracted for 930,120 24,734 223,360 289,600 Authorised but not contracted for 252,092 289,600 1,076,028 314,334 At 31 December 1,182,212 314,334 d) Other credit commitments Commitments to lend are agreements to lend to customers in future subject to certain conditions. Such commitments are normally made for fixed periods. The Bank may withdraw from its contractual obligations to extend credit by giving reasonable notice to the customers. NIC Bank Limited • Annual Report & Financial Statements 2011 • 89
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TAARIFA YA MWENYEKITI Inanifurahish
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