Annual Report 2010 (PDF) - USB Bank

Notes to the Financial Statements
as at 31 December 2010
24. Revaluation reserves and retained earnings (continued)
Retained earnings
Retained earnings are the only distributable reserve. In 2010 and 2009 no dividends were paid nor declared to
be paid since the Bank had accumulated losses.
As from 1 January 2003, companies which do not distribute at least 70% of their profits after tax as defined
by the Special Defence Contribution for the Republic Law, during the two years after the end of the year of
assessment to which the profits refer, will be deemed to have distributed this amount as dividend. Special
defence contribution at 15% will be payable on such deemed dividend distribution to the extent that the
shareholders (individuals and companies) at the end of the period of two years from the end of the year
of assessment to which the profits refer are tax residents of Cyprus. The amount of this deemed dividend
distribution is reduced by any actual dividend paid out of the profits of the relevant year. This special defence
contribution is paid by the Company on account of the shareholders. The amount of €53.418 presented in Note
21 of the financial statements represents the special defence contribution for deemed dividend distribution for
the profits of 2008, whilst in 2009 special defence contribution for deemed dividend distribution amounting to
€775.201 was paid for the profits of 2007.
25. Contingent liabilities and commitments
2010 2009
Contingent liabilities € €
Acceptances and endorsements 211.448 220.815
Guarantees 20.910.539 28.957.583
21.121.987 29.178.398
Commitments
Documentary credits and certified export credits 1.147.743 1.103.168
Unutilised limits 34.773.454 40.658.266
35.921.197 41.761.434
Unutilised limits are commitments for the provision of facilities to customers. The limits are provided for a fixed
period and are cancellable by the Bank after specific notice to the client.
Capital commitments
There were no commitments for contracted capital expenditure of the Bank as at 31 December 2010 (2009:
€51.645).
Pre-15 August 1974 deposits
The Bank has the obligation to repay the pre-15 August 1974 deposits €156.105 as at 31 December 2010
(2009: €156.226).
Litigation
As at 31 December 2010, in the ordinary course of business, the Bank is involved in lawsuits, which the
management of the Bank does not expect to have a significant effect on the financial positions and operations
of the Bank. At the same time, there are no pending claims or/and assessments against the Bank, the outcome
of which would have a material effect on the Bank’s financial position or operations.
Annual Report 2010 61