Notes to the Financial Statements 2020
Total Page：16
File Type：pdf, Size：1020Kb
HALKBANK A.D. BEOGRAD Financial Statements Year Ended December 31, 2020 And Notes to the Financial Statements Translation of the Auditors’ Report issued in the Serbian language Translation of the Bank’s Financial Statements and Notes to the Financial Statements issued in the Serbian language HALKBANK A.D. BEOGRAD CONTENTS Page Financial Statements: Statement of the Financial Position 4 Income Statement 5 Statement of Other Comprehensive Income 6 Statement of Changes in Equity 7 Statement of Cash Flows 8 Notes to the Financial Statements 9 - 108 Translation of the Auditors’ Report issued in the Serbian language Translation of the Bank’s Financial Statements and Notes to the Financial Statements issued in the Serbian language HALKBANK A.D. BEOGRAD NOTES TO THE FINANCIAL STATEMENTS December 31, 2020 All amounts expressed in thousands of RSD, unless otherwise stated. 1. BANK’S ESTABLISHMENT AND ACTIVITY 1.1. Establishment HALKBANK a.d. Beograd, formerly known as Čačanska banka, has been operating since July 1, 1956, and during its operations and development it has changed its legally registered name and organizational form several times. In May 2015, Turkiye Halk Bankasi AS, Instanbul/Turkey became the majority owner of Čačanska banka. The change of ownership caused the change to the Bank’s name and headquarters. The new name of the Bank is HALKBANK a.d. Beograd (hereinafter: the “Bank”). During 2018, Turkiye Halkbankasi AS, Istanbul/Turkey became it sole (100%) owner after purchase of the remaining shares held by the minority (non-controlling) shareholders. The Bank was registered with the Serbian Business Registers Agency under number BD 54244 as of September 13, 2005. 1.2. Activities The Bank is registered in the Republic of Serbia for payment, credit and deposit activities in the country and abroad and it operates in accordance with the effective Law on Banks. The Bank’s head office is in Belgrade, at the address of no. 9e, Milutina Milankovica Street, as registered with the Business Registers Agency under number BD 82129/2016 on October 19, 2016. As of December 31, 2020, the Bank's network consisted of 28 branches (2019: 25 branches), as follows: Belgrade (9 branches), Čačak (3 branches), Jagodina, Gornji Milanovac, Kraljevo, Užice, Kragujevac, Kruševac, Aranđelovac, Valjevo, Šabac, Niš, Leskovac, Novi Sad, Pančevo, Novi Pazar, Subotica and Smederevo. The Bank also had 7 sub-branches (2019: 9 sub-branches) in Paraćin, Požega, Topola, Ivanjica, Vrnjačka Banja, Zrenjanin and Tutin and 1 counter. In 2020 the Bank opened a new sub-branch in Zrenjanin. As of December 31, 2020, the Bank had 540 employees (December 31, 2019: 525 employees). The Bank’s tax identification number is 100895809. 2. BASIS OF PREPARATION AND PRESENTATION OF THE FINANCIAL STATEMENTS AND ACCOUNTING CONVENTION 2.1. Basis of Preparation and Presentation of the Financial Statements The financial statements of the Bank (hereinafter “the financial statements”) for 2020 have been prepared in accordance with International Financial Reporting Standards (“IFRS”) and the regulations of the National Bank of Serbia governing the financial reporting of banks. In accordance with the Law on Accounting ("Official Gazette of RS", No. 62/2013, 30/2018 and 73/2019), the Bank, as a large legal entity, is obligated to apply the International Financial Reporting Standards ("IFRS") . In addition, in accordance with the Amendments to the Law on Banks ("Official Gazette of RS", No. 14/2015), banks in the Republic of Serbia are obliged to apply International Financial Reporting Standards, as well as subsequent amendments to standards and related interpretations, from the date determined by the competent international body as the date of their application. The accompanying financial statements are presented in the format prescribed by the Decision on Forms and Content of Items in the Financial Statement Forms to Be Completed by Banks (Official Gazette of RS nos. 71/2014, 135/2014, 103/2018 and 93/2020). The accompanying financial statements are stand-alone financial statements of the Bank. The Bank is not a parent entity, i.e., it has no subsidiaries or associates so that it does not prepare consolidated financial statements. The Bank’s sole shareholder is Turkiye Halkbankasi AS, Istanbul/Turkey. 9 Translation of the Bank’s Financial Statements and Notes to the Financial Statements issued in the Serbian language HALKBANK A.D. BEOGRAD NOTES TO THE FINANCIAL STATEMENTS December 31, 2020 All amounts expressed in thousands of RSD, unless otherwise stated. 2. BASIS OF PREPARATION AND PRESENTATION OF THE FINANCIAL STATEMENTS AND ACCOUNTING CONVENTION (Continued) 2.1. Basis of Preparation and Presentation of the Financial Statements (Continued) The accompanying financial statements pertain to the reporting period ended December 31, 2020. These financial statements were approved and adopted by the Bank’s Executive Board on February 25, 2021. These financial statements were prepared at historical cost principle, except for the measurement of the following significant balance sheet items: • financial instruments measured at fair value through other comprehensive income (FVtOCI); and • derivative financial instruments stated at fair value. Historical cost is generally based on the fair value of consideration paid in exchange for goods and services. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between the market participants at the measurement date under current market conditions regardless of whether that price is directly observable or estimated using another valuation technique. Upon estimating the fair value of assets or liabilities, the Bank takes into account characteristics of assets or liabilities that other market participants would also consider upon determining the price of assets or liabilities at the measurement date. Fair value for measurement and/or disclosure purposes in the accompanying financial statements was determined in the aforesaid manner, except for leasing transactions, which are in the scope of IAS 17, and measurements that have some similarities to fair value but are not fair value, such as the net realizable value in IAS 2 or value in use in IAS 36. In addition, for financial reporting purposes, fair value measurements are categorized into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows: • Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date; • Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and • Level 3 inputs are unobservable inputs for the asset or liability. In the preparation of the accompanying financial statements, the Bank adhered to the accounting policies described in Note 3. Published standards and interpretations that have become effective in the current period are disclosed in Note 2.2, while new standards and amendments to existing standards that have been issued but are not yet in force are disclosed in Note 2.3. The Bank’s financial statements are stated in thousands of dinars unless it is otherwise stated. Dinar (RSD) is the official presentation currency in the Republic of Serbia. 2.2. Standards, Amendments to the Existing Standards and Interpretations Effective for the Current Reporting Period Amendments to IFRS 3 “Business Combinations” - Definition of a Business (effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after 1 January 2020 and to asset acquisitions that occur on or after the beginning of that period). Amendments to IFRS 9 “Financial Instruments”, IAS 39 “Financial Instruments: Recognition and Measurement” and IFRS 7 “Financial Instruments: Disclosures” - Interest Rate Benchmark Reform (effective for annual periods beginning on or after 1 January 2020), Amendments to IAS 1 “Presentation of Financial Statements” and IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors” - Definition of Material (effective for annual periods beginning on or after 1 January 2020); 10 Translation of the Bank’s Financial Statements and Notes to the Financial Statements issued in the Serbian language HALKBANK A.D. BEOGRAD NOTES TO THE FINANCIAL STATEMENTS December 31, 2020 All amounts expressed in thousands of RSD, unless otherwise stated. 2. BASIS OF PREPARATION AND PRESENTATION OF THE FINANCIAL STATEMENTS AND ACCOUNTING CONVENTION (Continued) 2.2. Standards, Amendments to the Existing Standards and Interpretations Effective for the Current Reporting Period (Continued) Amendments to References to the Conceptual Framework in IFRS Standards (effective for annual periods beginning on or after 1 January 2020). The adoption of these amendments to the existing standards has not led to any material changes in the Bank’s financial statements. 2.3. New Standards and Amendments to the Existing Standards in Issue not Yet Adopted At the date of authorization of these financial statements, the following new standard and amendments to existing standards were in issue, but not yet effective: IFRS 17 “Insurance Contracts” including amendments to IFRS 17 (effective for annual periods beginning on or after 1