Annual Report 2010 - ProCredit Bank

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Annual Report 2010
The tax on the Group’s profit before tax differs from the theoretical
amount that would arise using the official rate as follows:
Year ended 31 December
2010 2009
Profit before tax 506,261 869,974
Tax calculated at a tax rate of 10%
(2009: 10%) (50,626) (86,997)
Fines and penalties (695) (5)
Accounting depreciation
above tax depreciation (8,350) (10,960)
Other non-deductible expenses (41,487) (5,895)
Utilized tax credits 18,352 13,496
Unutilized tax credits brought forward 21,717 27,905
Current tax expenses (61,089) (62,456)
According to Serbian tax law, the Group is entitled to use tax credits
based on the amounts invested in property and equipment and
number of new employees hired and to reduce the current income
tax liability. Tax credits on new employees hired can be used by
the Group only in the year when declared. Tax credit on new investments
in property and equipment can be carried forward for a period
on 10 years. In order to be eligible to use these investment tax
credits, the Group should not dispose related property and equipment
items during a period of three years from the year when tax
credit was declared. Tax credit calculation is open to tax audit by
Tax Administration in a period of 5 years from the year when the tax
become due for payment.
12. Cash and balances with the Central Bank
The foreign currency required reserves are equal to the required reserves
calculated in Euros on March 17th 2010 in line with the National
Bank’s previous decision, reduced by the amount of required
reserves as calculated on that day in respect of foreign currency
balances held by leasing companies and increased by the amount
of dinar required reserves calculated on the same day in respect of
foreign currency clause indexed dinar liabilities. Banks could also
reduce the reference foreign currency required reserves by 25% of
the increase in special purpose loans relative to their balance on
February 28th 2010 on condition that this obligation after reduction
is not lower that the amount of calculated foreign currency required
reserves.
Mandatory reserves can be used by the Group in its day-to-day
operations. The NBS pays interest of 2.5% on mandatory reserve
in RSD and does not pay any interest on mandatory reserve in
foreign currency.
13. Loans and advances to banks
At 31 December
2010 2009
Nostro accounts (Note 33) 234,593 118,635
Money market placements (Note 33) 479,052 662,263
Total loans and advances to banks 713,645 780,898
Nostro accounts represent the account balances with Commerzbank,
Dresdner bank, ProCredit Bulgaria and Standard Chartered bank
GMBH, Standard Chartered bank New York and Deutsche Bank AG.
All loans and advances to banks are current assets.
At 31 December
2010 2009
Cash on hand 1,221,927 1,120,969
Mandatory reserve 19,792,630 20,735,686
Other Balances with the Central Bank 10,788 9,294
Treasury bills – 500,264
Total included in Cash and cash
equivalents (Note 33) 21,025,345 22,366,213
The National Bank of Serbia (NBS) regulations related to mandatory
reserve has been changed during 2010. At the end of December
mandatory reserve in local currency was calculated by applying
the rate of 5% on the average daily amount of Group’s deposit base
in local currency in the preceding month. At the end of December
mandatory reserve in foreign currency for borrowings from abroad
and for deposits in foreign currency were calculated by applying the
rate of 25% on the average daily amount of Bank’s deposit base in
foreign currency in the preceding month.
Mandatory reserves on subordinated debt are calculated applying
the rate of 0% on the average daily liabilities for subordinated debt
in preceding month, and for leasing agreements applying the rate
of 20% on average daily Leasing borrowings from abroad in preceding
month.
In March 2010 the National Bank of Serbia put into force decision
that stipulates that banks shall keep the average daily balance of allocated
foreign currency required reserves at least at the level of the
reference foreign currency required reserves, in any maintenance
period in which the calculated foreign currency required reserves
are lower than the reference foreign currency required reserves.
14. Loans and advances to customers
2010 2009
Legal entities 19,090,498 14,051,592
Small and medium enterprises 9,744,979 10,119,363
Agricultural 9,404,800 10,256,561
Private individuals 11,091,168 8,620,706
Total loans and advances
to customers 49,331,445 43,048,222
Unearned future finance income
on finance leases (307,407) (422,854)
Deferred fee income (411,149) (370,680)
Allowance for impairment (1,636,533) (1,582,920)
Net loans to customers 46,976,356 40,671,768
Accrued interest amounts RSD 450,834 thousand (2009: RSD
474,036 thousand).
Movement in allowance for losses on loans and advances are as
follows:
2010 2009
Balance at 1 January 1,582,920 980,799
Provision charge for loans and
advances impairment (Note 5) 1,022,379 923,342
Loans written off (1,031,702) (395,106)
Exchange rate differences 62,936 73,885
Balance 31 December 1,636,533 1,582,920