Annual Report - Raiffeisen Bank Kosovo JSC

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Financial Statements 18. Other Operating Expenses Year ended Year ended 31 December 31 December Note 2006 2005 Depreciation and amortisation 9 1,606 1,388 Rent 914 563 Security 730 581 IT consulting and recurring fees 107 76 Professional services – consulting fees 2,061 2,918 Telecommunication expenses 506 452 ATM expenses 857 533 Building and equipment maintenance 253 96 Staff travel, training and residence 525 370 Marketing, advertising, and sponsorship 670 353 Losses on disposal of fixed assets 24 93 Utilities and related expenses 319 263 Equipment and computers 433 286 Stationery 225 193 Insurance 143 145 Other 248 232 Total other operating expenses 9,621 8,542 19. Income Taxes Year ended Year ended 31 December 31 December 2006 2005 Current profit tax charge 2,549 1,735 Deferred taxation (77) 44 Income tax expense for the year 2,472 1,779 The income tax rate applicable to the Bank’s income is 20% (31 December 2005: 20%). The reconciliation between the expected and the actual taxation charge is provided below. Year ended Year ended 31 December 31 December 2006 2005 Profit before taxation 13,267 8,662 Theoretical tax charge for the year at the applicable statutory rate 2,653 1,732 Tax effect of items which are not deductible for taxation purposes: (104) 3 Current profit tax charge 2,549 1,735 58 www.raiffeisen-kosovo.com Supervisory Board Management Board Organisational Structure Vision and Mission RZB and RI .
Financial Statements Differences between IFRS financial statements and Kosovo statutory taxation regulations give rise to certain temporary differences between the carrying amount of certain assets and liabilities for financial reporting purposes and for profit tax purposes. The tax effect of the movement on these temporary differences is recorded at the rate of 20%. Tax effect of deductible temporary differences 31 December Movement 31 December 2005 during 2006 2006 Loan impairment provision 326 (172) 154 Leasehold improvements, equipment and intangible assets 56 58 114 Gross deferred tax asset 382 (114) 268 Less: non-recognised deferred tax asset (191) 191 - Total net deferred tax asset 191 77 268 The net deferred tax asset represents income taxes recoverable through future revenues and is recorded as a deferred tax asset on the balance sheet. Deferred income tax assets are recognised for tax loss carry forwards only to the extent that realisation of the related tax benefit is probable. 20. Financial Risk Management The risk management function within the Bank is carried out in respect of financial risks (credit, market, geographical, currency, liquidity and interest rate), operational risks and legal risks. The primary objectives of the financial risk management function are to establish risk limits and then to ensure that exposure to risks stays within these limits. The operational and legal risk management functions are intended to ensure proper functioning of internal policies and procedures to minimise operational and legal risks. Credit risk. The Bank takes on exposure to credit risk which is the risk that a counterparty will be unable to pay amounts in full when due. The Bank structures the levels of credit risk it undertakes by placing limits on the amount of risk accepted in relation to one borrower and to geographical and industry segments. Such risks are monitored on a revolving basis and subject to an annual or more frequent review. Limits on the level of credit risk by borrower are approved by Management. Exposure to credit risk is managed through regular analysis of the ability of borrowers and potential borrowers to meet interest and principal repayment obligations and by changing these lending limits, where appropriate. Exposure to credit risk is also managed, in part, by obtaining collateral and corporate and personal guarantees. The Bank’s maximum exposure to credit risk is primarily reflected in the carrying amounts of financial assets on the balance sheet. The impact of possible netting of assets and liabilities to reduce potential credit exposure is not significant. Credit risk for off-balance sheet financial instruments is defined as the possibility of sustaining a loss as a result of another party to a financial instrument failing to perform in accordance with the terms of the Glossary Macroeconomic Environment Overview Segment Reports Financial Statements Addresses www.raiffeisen-kosovo.com 59
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Annual Report 2006
Page 3 and 4:
Table of Contents Contents Introduc
Page 5 and 6:
Introduction Introduction by the Ch
Page 7 and 8:
Organisational Structure Organisati
Page 9 and 10: The RZB Group and Raiffeisen Intern
Page 11 and 12: Raiffeisen-Glossary Raiffeisen-Glos
Page 13 and 14: The Macroeconomic Environment The M
Page 15 and 16: The Macroeconomic Environment Trade
Page 17 and 18: Raiffeisen Bank Kosovo - Overview R
Page 19 and 20: Raiffeisen Bank Kosovo - Overview T
Page 21 and 22: Corporate Banking Corporate Banking
Page 23 and 24: Corporate Banking Key Issues when C
Page 25 and 26: Corporate Banking Liquidity and Int
Page 27 and 28: Retail Banking Retail Banking Small
Page 29 and 30: Retail Banking PI Loans and Overdra
Page 31 and 32: Retail Banking Risk and Credit Mana
Page 33 and 34: Retail Banking Local In/Out Tranfer
Page 35 and 36: Retail Banking Personnel Training a
Page 37 and 38: Financial Statements Financial Stat
Page 39 and 40: Financial Statements Independent Au
Page 41 and 42: Financial Statements Income Stateme
Page 43 and 44: Financial Statements Statements of
Page 45 and 46: Financial Statements is dependent o
Page 47 and 48: Financial Statements The provision
Page 49 and 50: Financial Statements The income tax
Page 51 and 52: Financial Statements 5. Cash and Ca
Page 53 and 54: Financial Statements 107,953 thousa
Page 55 and 56: Financial Statements As at 31 Decem
Page 57 and 58: Financial Statements 12. Other Liab
Page 59: Financial Statements 16. Other Inco
Page 63 and 64: Financial Statements Assets Currenc
Page 65 and 66: Financial Statements Overdue assets
Page 67 and 68: Financial Statements The table belo
Page 69 and 70: Financial Statements The total outs
Page 71 and 72: Financial Statements The remunerati
Page 73 and 74: Addresses and Contacts Skenderaj Su
Page 75 and 76: Addresses and Contacts Leasing Aust
Page 77 and 78: Addresses and Contacts Russia Moska
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Annual Report - Raiffeisen Bank Kosovo JSC

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