BANCA INTESA A.D. BELGRADE
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BANCA INTESA a.d. BELGRADE Separate Financial Statements as of and for the Year Ended 31 December 2017 and Independent Auditor’s Report BANCA INTESA a.d. BELGRADE CONTENTS Page INDEPENDENT AUDITOR’S REPORT 1 - 2 SEPARATE FINANCIAL STATEMENTS Separate Balance Sheet Separate Income Statement Separate Statement of Other Comprehensive Income Separate Statement of Changes in Equity Separate Statement of Cash Flows Notes to the Separate Financial Statements 1 - 98 ANNUAL BUSINESS REPORT This is an English translation of Independent Auditor’s Report and 2017 Separate Financial Statements originally issued in the Serbian language This is an English translation of Independent Auditor’s Report originally issued in the Serbian language INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDER AND THE BOARD OF DIRECTORS OF BANCA INTESA a.d. BELGRADE Report on Separate Financial Statements We have audited the accompanying separate financial statements of Banca Intesa a.d. Belgrade (hereinafter: the “Bank”), which comprise the separate balance sheet as of 31 December 2017, and the separate income statement, separate statement of other comprehensive income, separate statement of changes in equity and separate statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information. Management’s Responsibility for the Separate Financial Statements Management is responsible for the preparation and fair presentation of these separate financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these separate financial statements based on our audit. We conducted our audit in accordance with the Law on Auditing (“RS Official Gazette”, no. 62/2013) and Standards on Auditing applicable in the Republic of Serbia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the separate financial statements present fairly, in all material respects, the unconsolidated financial position of the Bank as of 31 December 2017, and its unconsolidated financial performance and its unconsolidated cash flows for the year then ended in accordance with International Financial Reporting Standards. INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDER AND THE BOARD OF DIRECTORS OF BANCA INTESA a.d. BELGRADE (Continued) Report on Separate Financial Statements (Continued) Other Matters The separate financial statements of the Bank as of and for the year ended 31 December 2016 were audited by another auditor who expressed an unqualified opinion on those financial statements on 14 February 2017. Report on Other Legal and Regulatory Requirements Management of the Bank is responsible for the preparation and fair presentation of the accompanying separate annual business report in accordance with the requirements of the Law on Accounting of the Republic of Serbia. Pursuant to the Law on Auditing and Decision on External Bank Audit, our responsibility is to express an opinion on the consistency of the Bank’s annual business report for the year ended 31 December 2017 with the audited separate financial statements for the same year. Our procedures in this regard were performed in accordance with the applicable Standard on Auditing 720 “The Auditor’s Responsibilities Relating to Other Information in Documents Containing Audited Financial Statements”, and are only limited to the assessment of the consistency of financial information disclosed in the annual business report with the audited separate financial statements. In our opinion, financial information disclosed in the Bank’s annual business report for the year ended 31 December 2017 is consistent, in all material respects, with the audited separate financial statements of the Bank for the year ended 31 December 2017. Belgrade, 14 February 2018 Ksenija Ristic Kostic Certified Auditor 2 BANCA INTESA a.d. BELGRADE SEPARATE BALANCE SHEET As of 31 December 2017 In RSD thousand 31 December 31 December Note 2017 2016 ASSETS Cash and balances with central bank 16, 2.10 82,851,636 102,370,900 Financial assets at fair value through profit and loss held for trading 17, 2.7 1,555,694 1,984,720 Financial assets initially carried at fair value through profit and loss 17, 2.7 46,143 46,068 Financial assets available for sale 17, 2.7 128,626,361 120,358,790 Loans and receivables from banks and other financial organizations 18, 2.7 29,253,557 37,591,812 Loans and receivables from customers 18, 2.7 301,894,205 271,749,929 Investments in subsidiaries 17, 2.11 962,496 962,496 Intangible assets 19, 2.12 2,610,573 1,347,422 Property, plants and equipment 20, 2.13 7,871,143 7,398,719 Investment property 20, 2.13 51,251 174,147 Deferred tax assets 14, 2.20 153,397 237,494 Non-current assets held for sale and discontinued operations 20, 2.13 1,653,117 1,697,057 Other assets 21 7,330,005 5,496,218 TOTAL ASSETS 564,859,578 551,415,772 LIABILITIES AND EQUITY Financial liabilities at fair value through profit and loss held for trading 22, 2.7 4,847 2,594 Deposits and other liabilities due to banks, other financial organizations and central bank 23, 2.7 32,375,037 34,055,459 Deposits and other liabilities due to customers 23, 2.7 397,705,235 383,452,558 Provisions 24, 2.17 1,277,294 1,753,517 Current tax liabilities 14, 2.20 387,008 55,668 Other liabilities 25 14,103,355 7,955,164 TOTAL LIABILITIES 445,852,776 427,274,960 EQUITY Share capital 26, 2.18 41,759,627 41,759,627 Retained earnings 26, 2.18 28,220,984 34,484,276 Reserves 26, 2.18 49,026,191 47,896,909 TOTAL EQUITY 119,006,802 124,140,812 TOTAL LIABILITIES AND EQUITY 564,859,578 551,415,772 Belgrade, 14 February 2018 Rada Radović Dragica Mihajlović Draginja Djurić Head of Accounting Chief Financial Officer President of the Executive Department Board BANCA INTESA a.d. BELGRADE SEPARATE INCOME STATEMENT For the Year Ended 31 December 2017 In RSD thousand Note 2017 2016 Interest income 3, 2.4 22,840,992 22,618,727 Interest expenses 3, 2.4 (3,592,295) (3,704,345) Net interest income 19,248,697 18,914,382 Fee and commission income 4, 2.5 10,595,219 9,350,652 Fee and commission expenses 4, 2.5 (4,019,393) (3,722,472) Net fee and commission income 6,575,826 5,628,180 Net gains on financial assets held for trading 5, 2.7 791,329 671,814 Net gains/(losses) on financial assets initially carried at fair value through profit and loss 6, 2.7 3,063 (8,642) Net gains/(losses) on financial assets available for sale 7, 2.7 165,169 (5,626) Net foreign exchange gains and effects of contracted foreign currency clause 8, 2.6 2,059,207 2,656,599 Other operating income 9 1,246,092 1,200,820 Net impairment loss on financial assets and provisions for credit risk-weighted off-balance sheet items 10, 2.7 (3,071,947) (4,381,721) TOTAL NET OPERATING INCOME 27,017,436 24,675,806 Salaries, compensations and other personal expenses 11, 2.19 (5,701,726) (5,738,671) Amortisation and depreciation 12, 2.12, 2.13 (987,173) (901,852) Other expenses 13 (7,316,779) (7,253,887) PROFIT BEFORE INCOME TAXES 13,011,758 10,781,396 Income taxes 14, 2.20 (1,164,064) (857,053) PROFIT FOR THE YEAR 11,847,694 9,924,343 Basic earnings per share (in RSD) 15 55,581 46,558 Belgrade, 14 February 2018 Rada Radović Dragica Mihajlović Draginja Djurić Head of Accounting Chief Financial Officer President of the Executive Department Board BANCA INTESA a.d. BELGRADE SEPARATE STATEMENT OF OTHER COMPREHENSIVE INCOME For the Year Ended 31 December 2017 In RSD thousand 2017 2016 PROFIT FOR THE YEAR 11,847,694 9,924,343 Other comprehensive income Items that cannot be reclassified to profit and loss: Increase in revaluation reserves based on valuation of intangible assets and property. plant and equipment 721,294 - Items that may be reclassified to profit and loss: Unrealized gains/(losses) – fair value adjustment of available-for-sale financial assets 516,182 (381,475) Related tax (108,194) - Other comprehensive income/(loss), net of tax 1,129,282 (381,475) TOTAL COMPREHENSIVE INCOME FOR THE YEAR 12,976,976 9,542,868 Belgrade, 14 February 2018 Rada Radović Dragica Mihajlović Draginja Djurić Head of Accounting Chief Financial Officer President of the Executive Department Board BANCA INTESA a.d.