Explanatory Notes
General
Basis of Consolidation
Valuation Principles and Result
Determination
The present financial statements have been drawn up in
accordance with the provisions laid down in Book 2,
Title 9 of the Dutch Civil Code,- the Decree governing
Financial Statements prepared by Banks; the Decree
governing Draft Financial Statements; and relevant
recommendations made by De Nederlandsche
Bank N.V.
Changes in the classification of items in financial
statements and in the principles used for valuation
purposes and result determination.
With the introduction of the aforementioned
regulations, a number of important changes have been
made to the classification of items in the present
financial statements. Wherever possible, the
corresponding figures for 1992 have been adapted
accordingly, to facilitate comparisons.
All figures are expressed in thousands of guilders, unless
otherwise stated.
The group financial statements include the figures for
FGH BANK N.V., its subsidiaries and group companies,
but do not include the results of those companies which
together only make a very minor contribution to the
overall result nor do they include the results of those
companies that are only being retained with a view to
disposal.
Proportional consolidation has been applied to
participating interests designated as joint ventures,
where the joint ventures in question are financial
institutions. Other joint ventures have been included in
the group financial statements as participating interests.
The income from non-consolidated participating
interests has been included under the heading 'Income
from securities and participating interests'.
Assets and Liabilities
Assets and liabilities are valued at nominal value, unless
otherwise stated. Where appropriate, the value of the
assets has been reduced accordingly. Reductions in value
arising out of bad debts are generally specified per item.
In accordance with Article VI of the 'Act dated
March 17, 1993, concerning the provisions governing
the financial statements prepared by banks' an
additional write-down has been applied to the item
'Loans'. Any subsequent upward or downward revisions
to this extra write-down will be accounted for under the
heading 'Value adjustments to receivables' in the
income statement. Every effort will be made to ensure
that the level of the extra write-down will closely
reflect the associated risks. Any taxes connected with
upward and downward revisions to the extra
write-down will be routed via this item. The new
procedure has been introduced to replace the system
used prior to 1993, which involved the establishment of
a provision for general contingencies.
Participating interests
Participating interests are valued at their intrinsic value
on the basis of the valuation principles as applied by
FGH BANK N.V. Interests in non-consolidated
participating interests in excess of 20% are valued on
the basis of their net asset value. Changes in the
intrinsic value of participating interests are included
with the income from the sale of participating interests
under 'Income from securities and participating
interests', insofar as such value changes affect the
results obtained.
Real Estate and Equipment
Real Estate for own use:
Office buildings in own use are valued at current value.
The buildings in question are amortized on a
straight-line basis over the estimated useful life, with
allowance being made for a residual value.
Real estate not for own use:
- Properties earmarked for sale are valued at acquisition
or development cost, less amortization or at the
projected market value, if this represents a lower figure.
- Properties to be kept as long-term investments are
valued at current value.
- Development properties are valued at construction
cost or in terms of their realizable value, if this
represents a lower figure.
Equipment:
Equipment is valued at acquisition cost less
amortization,- the latter is calculated on a straight-line
basis over the estimated economic life.
Taxation
Deferred assets are included under the heading 'Accrued
assets' and deferred liabilities under the heading
'Provisions'.
Deferred assets and liabilities, arising from differences
in the fiscal treatment of assets and liabilities, are
