2009 Annual Report and Financial Statements - UBA Plc

Notes to the consolidated fi nancial statements
for the period ended 31 December 2009 (continued)
76
Annual Report 2009
Statutory SMIEIS Capital Translation Bonus issue Other Retained
reserve reserve reserve reserve reserve reserve earnings Total
N’million N’million N’million N’million N’million N’million N’million N’million
32. RESERVES
Group
At start of period 19 224 2 635 1 698 1 997 2 156 27 710 31 861 59 571
Transfer to share capital – – – – (2 156) (2 156) – (2 156)
Arising during the period – – – – – – (789) (789)
Transfer from profi t and
loss account 1 934 – – – – 1 934 179 2 113
21 158 2 635 1 698 1 997 – 27 488 31 251 58 739
Net change due to exchange
rate movement – – – 54 – 54 – 54
Dividend paid – – – – – – (12 934) (12 934)
At end of period 21 158 2 635 1 698 2 051 – 27 542 18 317 45 859
Statutory SMIEIS Translation Bonus issue Other Retained
reserve reserve reserve reserve reserve earnings Total
N’million N’million N’million N’million N’million N’million N’million
Bank
At start of period 19 224 2 635 1 997 2 156 26 012 28 254 54 266
Transfer from profi t and loss account 1 934 – – – 1 934 10 955 12 889
21 158 2 635 1 997 2 156 27 946 39 209 67 155
Transfer to share capital – – – (2 156) (2 156) – (2 156)
Dividend paid – – – – – (12 934) (12 934)
At end of period 21 158 2 635 1 997 – 25 790 26 275 52 065
Nigerian banking regulations require the Bank to make an annual appropriation to a statutory reserve. As stipulated by section 16(1) of the
Bank and Other Financial Institutions Act of 1991 (amended), an appropriation of 30% of the profi t after tax is made if the statutory reserve
is less than the paid up share capital and 15% of profi t after tax if the statutory reserve is greater than the paid up share capital.
The SMEIS reserve is maintained to comply with the Central Bank of Nigeria (CBN) requirement that all licensed banks set aside a portion of
their profi t after tax in a fund to be used to fi nance equity investments in qualifying small and medium scale enterprises. Under the terms
of the guideline (amended by CBN letter dated 11 July 2006), the contributions will be 10% of profi t after tax and shall continue after the
fi rst fi ve years but banks’ contributions shall thereafter reduce to 5% of profi t after tax. However, this is no longer mandatory. The small and
medium scale industries equity investment scheme reserves are non-distributable.
33. OFF-BALANCE SHEET ENGAGEMENTS AND CONTINGENCIES
Legal proceedings
The Group in the ordinary course of business is presently involved in 120 litigation suits amounting to N15 817 430 533.04 of which a
provision of N56 129 949.85 has been made in the accounts. The Directors are of the opinion that none of of the remaining cases is likely to
have a material adverse eff ect on the Bank and are not aware of any other pending or threatened claims and litigations.
Capital commitments
At the balance sheet date, the Bank had capital commitments amounting to N246 million (2008: N11.5 million) in respect of authorised and
contracted capital projects.