consolidated annual report - Gruppo Banca Sella

on consolidation, is calculated in case the conditions
which may bring variations in taxes in the short/medium
term should appear.
Other provisions
“Other provisions” include the reserve for costs relevant
to the financial year, for which the amount will be definitely
assessed in subsequent years and prudential reserves in
connection with engagements towards the Deposit Guarantee
Scheme and in connection with risks and charges
certain or likely to intervene, the amount of which cannot
be determined at the closing of the financial year.
Reserve for general banking risks
The reserve, created in accordance with art. 11 Law
by Decree No.87 of 27/1/1992, is set aside against the
general business risks of banking activity.
Reserve for possible loan losses
The reserve for possible loan losses, which was created
to face any possible losses on loans, has no function
of adjustment on the total value of assets.
Subscribed capital, share premium account, reserves
and revaluation reserves
These items show the subscribed capital, fully paid
in and the reserves created during the years following
shareholders’ meetings deliberations and in accordance
with the law.
As regards “Equity reserves” in suspension of taxation,
provisions have been made only as against tax relief
for taxes already paid following art. 1, Law by Decree
No. 467 18/12/1997, as, at the moment, no operations
are foreseen so as to determine further taxation.
Guarantees and commitments
This item includes the guarantees and commitments
described in section 10 of the Explanatory Notes to the
Financial Statements, which also includes assets lodged
to guarantee the Group’s debts, margins usable on credit
lines and forward transactions and derivative contracts
which are not shown, in accordance with the disposi-
tions, in the Balance Sheet. Guarantees given are entered
at contract value of the commitment undertaken
towards the beneficiary.
Commitments, forward transactions and the other
above-mentioned items are stated as follows:
• deposit and loan contracts: on the basis of the
amount to be granted and/or to be received;
• irrevocable lines of credit: on the basis of the available
amount;
• securities and currencies purchase contracts: on the
basis of "ex coupon" settlement price;
• derivative contracts on securities, currencies and
other instruments involving the exchange of capital:
on the basis of settlement price, with the exception
of those contracts dealt with in markets which provide
for the exchange of daily margins (futures, options)
which are stated at nominal value;
• derivative contracts not involving the exchange of
capital (contracts on interest rates and on indexes):
on the basis of the relevant notional capital;
• other commitments and risks: on the basis of the
contract value of the undertaken commitment.
Premiums paid and those collected for options on
securities and on currencies are entered in the balance
sheet until the period date of the operation or its expiry
date.
The premium represents the value of the option contract.
Administration and dealing on behalf of third
parties
Assets purchased or sold in the name and on behalf
of third parties are not stated in the Balance Sheet.
Details concerning these assets are shown in the relevant
sections of the Explanatory Notes to the Financial
Statements.
Interest payable and receivable
Interest are entered in the financial statements on
an accrual basis and include other charges and revenues
in accordance with art. 13 Law by Decree No. 87 of
27/1/1992.
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