Financial Statements 2005
ENCOURAGEMENT BANK AD
Income statement for the year ended 31 December 2005
| 2005 BGN'000 |
2004 BGN'000 restated |
|
| Interest and other similar income | 9 264 | 7 947 |
| Interest and other similar expenses | (1 413) | (1 162) |
| Net interest and other similar income | 7 851 | 6 785 |
| Fee and commission income | 259 | 363 |
| Fee and commission expenses | (20) | (22) |
| Net fee and commission income | 239 | 341 |
| Gains less losses from dealing in foreign currencies | 77 | 110 |
| Gains less losses from securities available-for-sale | 45 | 814 |
| Other operating income | 150 | 49 |
| Total operating income | 8 362 | 8 099 |
| Loan impairment and uncollectability losses | (1 482) | (2 400) |
| General administrative expensesи | (3 608) | (3 302) |
| Profit before taxes | 3 272 | 2 397 |
| Income tax expense | (494) | (480) |
| Net profit for the year | 2 778 | 1 917 |
Balance sheet as at 31 December 2005
| 31 December 2005 BGN'000 |
31 December 2004 BGN'000 restated |
|
| Assets | ||
| Cash and balances with the Central Bank | 4 597 | 5 893 |
| Due from other banks | 4 095 | 4 721 |
| Loans and advances to customers | 69 066 | 64 394 |
| Securities available-for-sale | 13 697 | 16 238 |
| Security held-to-maturity | 197 | 197 |
| Property and equipment | 2 323 | 2 351 |
| Intangible assets | 103 | 184 |
| Other assets | 94 | 508 |
| Total assets | 94 172 | 94 486 |
| Liabilities | ||
| Due to other banks | 273 | 1.347 |
| Due to customers | 2.960 | 3.850 |
| Borrowed funds from international institutions | 47 255 | 49 543 |
| Other borrowed funds | 6 272 | 5 367 |
| Other liabilities | 376 | 311 |
| Differed tax liabilities | 196 | 134 |
| Total liabilities | 57 332 | 60 552 |
| Shareholders' equity | ||
| Share capital | 29 574 | 29 574 |
| Reserves | 7.266 | 4 360 |
| Total shareholders' equity | 36 840 | 33 934 |
| Total shareholders' equity and liabilities | 94 172 | 94 486 |
Cash flow statement for the year ended 31 December 2005
| 2005 BGN'000 | 2004 BGN'000 restated |
|
| Cash flow from operating activities | ||
| Profit before taxes | 3 272 | 2 397 |
| Loan impairment and uncollectability losses | 1 482 | 2 400 |
| Depreciation/amortization | 322 | 313 |
| Impairment of other assets | - | 68 |
| Net book value of assets written off | 65 | 21 |
| Cash flows from operating profits before changes in operating assets and liabilities | 5 141 | 5 199 |
| Changes in operating assets and liabilities: | ||
| Decrease/(increase) in mandatory reserve deposit at the Cental Bank | 186 | (4 543) |
| Increase in placements with other banks | (2 000) | (2 000) |
| Increase in loans and advances to customers | (6 049) | (26 514) |
| Decrease/(Increase) in securities available-for-sale | 2 934 | 8 200 |
| Decrease/(Increase) in interest and fee receivables | 14 | 162 |
| Decrease/(Increase) in other assets | 123 | 14 |
| Increase/ (decrease) in amounts due to other banks | (1 074) | 1 261 |
| Increase in amounts due to customers | (890) | 2 273 |
| Increase/ (decrease) in other borrowed funds | 3 164 | 231 |
| Increase in interest and fee payables | - | 68 |
| Increase/ (decrease) in other liabilities | (55) | 97 |
| Net cash used in operating activities before income taxes | (5 494) | (15 552) |
| Income taxes paid | (134) | (1 012) |
| Net cash used in operating activities | (5 360) | (16 564) |
| Cash flows from investing activities | ||
| Purchase of equipment and computer software | (278) | (419) |
| Purchase of held-to-maturity securities | - | (196) |
| Net cash used in investing activities | (278) | (615) |
| Cash flows from financing activities | ||
| Dividends paid | (260) | (1 182) |
| Proceeds from other borrowed funds | 1 956 | 24 663 |
| Payments on other borrowed funds | (6 440) | (6 499) |
| Net cash from financing activities | (4 744) | 16 982 |
| Net (decrease)/ increase in cash and cash equivalents | 338 | (197) |
| Cash and cash equivalents at the beginning of the year | 3 842 | 4 039 |
| Cash and cash equivalents at the end of the year | 4 180 | 3 842 |
Statement of changes in shareholders' equity for the year ended 31 December 2005
| Share capital BGN'000 | Statutory reserves BGN'000 | Other reserves BGN'000 | Revaluation reserve BGN'000 | Retained earnings BGN'000 | Total BGN'000 | |
| Balance at 31 December 2003 (adjusted) | 29 574 | 702 | 302 | 1 072 | 1 657 | 33 307 |
| Allocation of profit for year 2003 for: | - | 365 | 1 182 | - | (2 729) | (1 182) |
| * Reserves | - | 365 | 1 182 | - | (1 547) | - |
| * Dividends | - | - | - | - | (1 182) | (1 182) |
| Transfer to "profits and losses for the year" upon sale of available-for-sale investments | (845) | (845) | ||||
| Net unrealised valuation gains from available-for-sale investments taken to equity | - | - | - | 647 | - | 647 |
| Effect of deferred taxes on items directly taken to equity | - | - | - | 90 | 90 | |
| Net profit for the year | - | - | - | - | 1 917 | 1 917 |
| Balance at 31 December 2004 (originaly adjusted) | 29 574 | 1 067 | 1 484 | 964 | 845 | 33 934 |
| Allocation of profit year 2004 for: | - | 325 | 260 | - | (845) | (260) |
| * Reserves | - | 325 | 260 | - | (585) | - |
| * Dividends | - | - | - | - | (260) | (260) |
| Transfer to "profits and losses for the year" upon sale of available-for-sale investments | - | - | - | (47) | - | (47) |
| Net unrealised valuation gains from available-for-sale investments taken to equity | 503 | 503 | ||||
| Effect of deferred taxes on items directly taken to equity | - | - | - | (68) | - | (68) |
| Net profit for the year | - | - | - | - | 2 778 | 2 778 |
| Balance at 31 December 2005 | 29 574 | 1 392 | 1 744 | 1 352 | 2 778 | 36 840 |
The financial statements have been approved for issue by the Management Board of Encouragement Bank AD on 29 MARCH 2006 and signed on its behalf by:
Dimitar Dimitrov
Executive Director
Sasho Tchakalski
Executive Director
Ivan Lichev
Chief Accountant
