Annual Report 2010 - ProCredit Bank

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76 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
Financial Statements 77 Loans and advances to customers include finance lease receivables: 2010 2009 Gross investment in finance leases: No later than 1 year 1,234,602 1,273,715 Later than 1 year and no later than 5 years 1,394,359 1,779,714 Later than 5 years 2,169 2,613 2,631,130 3,056,042 Unearned future finance income on finance leases (307,406) (406,720) Net investment in finance leases 2,323,724 2,649,322 Net investment in finance lease is analyzed as follows: 17. Other financial investments At 31 December 2010 2009 Shares in equity – PC Academy Eastern Europe 7,924 7,924 Total financial investments 7,924 7,924 Other financial investments are classified as financial assets available for sale. The Banks has investment in the capital of PC Academy Eastern Europe. The amount of capital paid in 2007 is EUR 100 thousand which corresponds with 9.09% of the total capital of this entity. The investment is carried at cost. There is no active market for this investment and there are no recent transactions which would provide evidence for their current market value. 2010 2009 No later than 1 year 1,063,833 1,066,285 Later than 1 year and no later than 5 years 1,257,870 1,580,493 Later than 5 years 2,021 2,544 2,323,724 2,649,322 15. Derivative financial assets Derivative financial assets in the amount of RSD 105 thousand (2009: RSD 4 thousand) include currency swaps with clients bank. Currency swaps are commitments to exchange one set of cash flows for another. The risk is monitored on an ongoing base with reference to the current fair value, and the liquidity of the market. During 2010 the Group entered into foreign currency swap agreements in order to hedge its open currency position. The foreign currency swaps are economic hedges only and the hedge accounting is not being applied. 16. Financial assets available for sale Financial assets available for sale include Visa International shares in amount RSD 11,639 thousand and SWIFT shares in amount RSD 1,979 thousand. At 31 December 2010 2009 Shares in companies situated in OECD countries 13,618 13,973 Total available-for-sale financial assets 13,618 13,973 18. Intangible assets The movement in intangible assets for the years 2010 and 2009 is presented in table below: Software Cost Balance, 1 January 2009 61,183 Disposals 239,640 Additions (22) Balance, 31 December 2009 300,801 Accumulated amortization Balance, 1 January 2009 27,837 Charge for the year 21,976 Disposals (22) Balance, 31 December 2009 49,791 Net Book Value 31 December 2009 251,010 Cost Balance, 1 January 2010 300,801 Additions 23,618 Disposals (87) Balance, 31 December 2010 324,332 Accumulated amortization Balance, 1 January 2010 49,791 Charge for the year 53,943 Disposals (78) Balance, 31 December 2010 103,656 Net Book Value 31 December 2010 220,676 The revaluation for available for sale financial assets in other comprehensive income show the following changes in: Movements in revaluation reserve (AFS) 2010 2009 As at January 1 5,384 998 Fair value remeasurement (2,825) 4,873 Deferred taxes 282 (487) As of December 31 2,841 5,384
Page 1 and 2:
Annual Report 2010
Page 3 and 4:
Contents 3 Mission Statement 4 Lett
Page 5 and 6:
Letter from the Board of Directors
Page 7 and 8:
The Bank and its Shareholders 7 Com
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Special Feature 9 of life, ProCredi
Page 11 and 12:
Management Business Review 11 Polit
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Management Business Review 13
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Management Business Review 15 the b
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Management Business Review 17 Domes
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Management Business Review 19 partn
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Risk Management 21 Credit Risk Mana
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Risk Management 23 bia, like the ot
Page 25 and 26: Risk Management 25 In 2010 the bank
Page 27 and 28: Branch Network 27 tegic, often dens
Page 29 and 30: Organisation, Staff and Staff Devel
Page 31 and 32: Business Ethics and Environmental S
Page 33 and 34: The ProCredit Group: Responsible Ne
Page 35 and 36: The ProCredit Group: Responsible Ne
Page 37 and 38: ProCredit in Eastern Europe 37 Bela
Page 39 and 40: ProCredit in Eastern Europe 39 Name
Page 41 and 42: Our Clients 41 Katalin Muzlai, Catt
Page 43 and 44: Our Clients 43 Aleksandra Zoric Krz
Page 45 and 46: Financial Statements 45
Page 47 and 48: Financial Statements 47
Page 49 and 50: Financial Statements 49 Consolidate
Page 51 and 52: Financial Statements 51 Group Cash-
Page 53 and 54: Financial Statements 53 Gains and l
Page 55 and 56: Financial Statements 55 N) Property
Page 57 and 58: Financial Statements 57 Y) Comparat
Page 59 and 60: Financial Statements 59 Table below
Page 61 and 62: Financial Statements 61 Individual
Page 63 and 64: Financial Statements 63 2010 2009 I
Page 65 and 66: Financial Statements 65 (b) Loans a
Page 67 and 68: Financial Statements 67 2010 2009 P
Page 69 and 70: Financial Statements 69 31 December
Page 71 and 72: Financial Statements 71 Assessment
Page 73 and 74: Financial Statements 73 Subordinate
Page 75: Financial Statements 75 6. Net fee
Page 79 and 80: Financial Statements 79 22. Other a
Page 81 and 82: Financial Statements 81 27. Subordi
Page 83 and 84: Financial Statements 83 At 31 Decem
Page 85 and 86: Contact Addresses 85 Sabac 1 Cara D
Page 87: Contact Addresses 87
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Annual Report 2010 - ProCredit Bank

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