Financial statements 2006
ENCOURAGEMENT BANK AD
INCOME STATEMENT for the year ended 31 December 2006
| 2006 BGN'000 | 2005 BGN'000 restated | |
| Interest and other similar income | 10 515 | 9 264 |
| Interest and other similar expenses | (1 664) | (1 413) |
| Net interest and other similar income | 8 851 | 7 851 |
| Fee and commission income | 290 | 259 |
| Fee and commission expenses | (18) | (20) |
| Net fee and commission income | 272 | 239 |
| Gains less losses from dealing in foreign currencies | 61 | 77 |
| Gains less losses from securities available-for-sale | 359 | 45 |
| Other operating income | 175 | 150 |
| Total operating income | 9 718 | 8 362 |
| Loan impairment and uncollectability losses | (2 767) | (1 482) |
| General administrative expenses | (3 378) | (3 608) |
| Profit before taxes | 3 573 | 3 272 |
| Income tax expense | (550) | (494) |
| Net profit for the year | 3 023 | 2 778 |
BALANCE SHEET as at 31 December 2006
| 31 Dec 2006 BGN'000 | 31 Dec 2005 BGN'000 restated | |
| Assets | ||
| Cash and balances with the Central Bank | 6 138 | 4 597 |
| Due from other banks | 23 104 | 4 095 |
| Loans and advances to customers | 67 205 | 69 066 |
| Securities available-for-sale | 9 239 | 13 697 |
| Security held-to-maturity | 197 | 197 |
| Non-current assets hold-for-sale | 2 206 | 8 |
| Property and equipment | 2 177 | 2 323 |
| Intangible assets | 74 | 103 |
| Other assets | 150 | 86 |
| Total assets | 110 490 | 94 172 |
| Liabilities | ||
| Due to other banks | 1 | 273 |
| Due to customers | 6 674 | 2 960 |
| Borrowed funds from international institutions | 55 011 | 47 255 |
| Other borrowed funds | 9 063 | 6 272 |
| Other liabilities | 445 | 376 |
| Differed tax liabilities | 55 | 196 |
| Total liabilities | 71 249 | 57 332 |
| Shareholders' equity | ||
| Share capital | 29 574 | 29 574 |
| Reserves | 9 667 | 7 266 |
| Total shareholders' equity | 39 241 | 36 840 |
| Total shareholders' equity and liabilities | 110 490 | 94 172 |
CASH FLOW STATEMENT for the year ended 31 December 2006
| 2006 BGN'000 | 2005 BGN'000 restated | |
| Cash flow from operating activities | ||
| Profit before taxes | 3 573 | 3 272 |
| Loan impairment and uncollectability losses | 2 767 | 1 482 |
| Depreciation/amortization | 264 | 322 |
| Net book value of assets written off | 9 | 65 |
| Cash flows from operating profits before changes in operating assets and liabilities | 6 613 | 5 141 |
| Changes in operating assets and liabilities: | ||
| (Increase)/decrease in mandatory reserve deposit at the Cental Bank | (1 132) | 186 |
| Decrease in amounts due from other banks | - | 2 000 |
| Increase in loans and advances to customers | (3 094) | (6 049) |
| Decrease in securities available-for-sale | 3 586 | 2 934 |
| Increase in non-current assets held-for-sale | (47) | - |
| Decrease in interest and fee receivables | 118 | 14 |
| Increase/ (decrease) in other assets | (64) | 123 |
| Decrease in amounts due to other banks | (272) | (1 074) |
| Increase/ (decrease) in amount due to customers | 3 712 | (890) |
| Increase in other borrowed funds | 4 057 | 3 164 |
| Increase in interest and fee payables | 114 | - |
| Increase/ (decrease) in other liabilities | 119 | (55) |
| Net cash used in operating activities before income taxes | 13 710 | 5 494 |
| Income taxes paid | (583) | (134) |
| Net cash used in operating activities | 13 127 | 5 360 |
| Cash flows from investing activities | ||
| Purchase of equipment and computer software | (98) | (278) |
| Net cash used in investing activities | (98) | (278) |
| Cash flows from financing activities | ||
| Dividends paid | - | (260) |
| Proceeds from long-term borrowed funds | 9 779 | 1 956 |
| Payments on long-term borrowed funds | (3 401) | (6 440) |
| Net cash from/(used in) financing activities | 6 378 | (4 744) |
| Net increase in cash and cash equivalents | 19 407 | 338 |
| Cash and cash equivalents at the beginning of the year | 4 180 | 3 842 |
| Cash and cash equivalents at the end of the year | 23 587 | 4 180 |
STATEMENT OF CHANGES IN EQUITY for the year ended 31 December 2006
| 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 1 January 2005 | 29 574 | 1 067 | 1 484 | 964 | 845 | 33 934 |
| Allocation of profit for 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 |
| Allocation of profit year 2005 for: | - | 2 778 | - | - | (2 778) | - |
| * Reserves | - | 2 778 | - | - | (2 778) | - |
| Transfer to "profits and losses for the year" upon sale of available-for-sale investments | - | - | - | (452) | - | (452) |
| Net unrealised valuation gains from available-for-sale investments taken to equity | - | - | - | (328) | - | (328) |
| Effect of deferred taxes on items directly taken to equity | - | - | - | 158 | - | 158 |
| Net profit for the year | - | - | - | - | 3 023 | 3 023 |
| Balance at 31 December 2006 | 29 574 | 4 170 | 1 744 | 730 | 3 023 | 39 241 |
The accompanying notes on pages 5 to 39 form an integral part of these financial statements.
Dimitar Dimitrov
Executive Director
Angel Gekov
Executive Director
Ivan Lichev
Chief Accountant
