Instructions for Completing Financial and Additional Reports of Leasing Companies

Based on Article 6, paragraph 2 of the Regulation on the structure and content as well as the method and deadlines for submission of financial and additional reports of leasing companies ("Narodne novine" No. 41/16, 132/17, and 142/22), the Croatian Financial Services Supervisory Agency, at the meeting of the Board of Directors held on December 21, 2022, adopts

INSTRUCTIONS FOR COMPLETING FINANCIAL AND ADDITIONAL REPORTS OF LEASING COMPANIES

1. INTRODUCTION These Instructions regulate the method of completing financial and additional reports of leasing companies. When preparing the aforementioned reports, leasing companies are obliged to act in accordance with these Instructions.

These Instructions are applied for the first time for annual financial and additional reports prepared as of December 31, 2023, and for quarterly financial and additional reports prepared as of March 31, 2023, in accordance with the Regulation on the structure and content as well as the method and deadlines for submission of financial and additional reports of leasing companies ("Narodne novine" No. 41/16, 132/17, and 142/22; hereinafter: the Regulation).

2. FINANCIAL AND ADDITIONAL REPORTS OF LEASING COMPANIES The structure and content of financial and additional reports through which a leasing company reports to the Agency and other users on its financial position, business performance, cash flows, and other information about its business are prescribed by the Regulation. The structure and content of financial and additional reports of leasing companies are detailed in the forms of the Regulation. Financial reports of leasing companies, whose content and structure are prescribed by the forms in the Regulation, are:
3. Balance Sheet (BS),
4. Statement of Comprehensive Income (SCI),
5. Statement of Cash Flows (SCF),
6. Statement of Changes in Equity (SCE).

Additional reports of leasing companies, whose content and structure are prescribed by the forms in the Regulation, are:

1. Report on Portfolio Structure – Operating Leasing (PS-OL),

2. Report on Portfolio Structure – Financial Leasing (PS-FL),

3. Report on Portfolio Structure – Loans (PS-L),

4. Report on Changes in Allowance for Impairment (AI),

5. Report on Net Book Value of Assets in Operating Leasing (NBV-OL),

6. Report on Age Structure of Overdue Unpaid Financial Assets (AOF),

7. Report on Currency Structure of Assets and Liabilities (CS-AL),

8. Report on Maturity Structure of Assets and Liabilities (MS-AL),

9. Report on Minimum Lease Payments (MLP),

10. Report on Acquired Assets (AA),

11. Report on Objects Leased and Rented Out (L-RO),

12. Report on Large Exposures (LE),

13. Report on Creditors (CR),

14. Report on Portfolio Quality (PQ).

15. CLASSIFICATION OF ASSETS AND LIABILITIES For the purpose of preparing the prescribed financial and additional reports, a leasing company is obliged to classify certain categories of its assets and liabilities by institutional sectors. In this regard, institutional units are classified into sectors in accordance with regulations governing the sectoral classification of institutional sectors, and the allocation of business entities (legal and natural persons) is carried out in accordance with the National Classification of Activities.

16. FINANCIAL REPORTS 4.1. Balance Sheet I. General Instructions The Balance Sheet shows the assets, liabilities, and equity of the leasing company as of the reporting period and as of the previous reporting period.

II. Instructions for Completing Specific Items Line 1 Long-term Assets (position 2+3+15+21+24) Line 2 Intangible Assets – indicate the value of intangible assets reduced by allowance for depreciation and impairment of intangible assets as well as intangible assets in preparation and advances for intangible assets (account 00). Line 3 Tangible Assets (position 4+5+13+14) Line 4 Tangible Assets in Preparation (Investments in Progress) – indicate the net value (after reduction for the amount of allowance) of advances for tangible assets given in operating leasing (account 017), tangible assets in preparation for operating leasing (account 018), as well as advances for own tangible assets (account 027) and own tangible assets in preparation (account 028). Line 5 Tangible Assets Given in Operating Leasing (position 6+7+8+9+10+11+12) – indicate the value of tangible assets given in operating leasing reduced by allowance for depreciation and impairment of tangible assets, distributed by types of leasing objects (accounts 010, 011, 012, 013, 014, 015, and 016). Line 13 Other Tangible Assets – indicate the net value (after reduction for allowances for depreciation and impairment of tangible assets) of other tangible assets (accounts 020, 021, 022, 023, 024, 025, and 026, and account 06). Line 14 Assets Leased and Rented Out – indicate the value of tangible assets acquired from financial and operating leasing contracts and given for rent and lease, reduced by allowance for depreciation and impairment of tangible assets (account 05). Line 15 Long-term Financial Assets (position 16+17+18+19+20) Line 16 Investments in Subsidiaries, Associates, and Joint Ventures – indicate the total amount of long-term investments in subsidiaries, associates, and joint ventures reduced by the amount of allowance (accounts 031, 032, and 033). Line 17 Investments in Long-term Securities – indicate the amount of placements in debt and equity securities with a maturity longer than 1 year, reduced by the amount of allowance (account 035). Line 18 Long-term Loans Granted – indicate the total amount of receivables based on loans granted with a maturity longer than 1 year, reduced by the allowance for receivables (account 036). Line 19 Long-term Deposits – indicate the amount of deposits with banks with a maturity longer than 1 year, reduced by allowances (account 0370). Line 20 Other Long-term Financial Assets – indicate the value of long-term financial assets not previously mentioned, reduced by the amount of allowance (account 038), and guarantees with a return period longer than one year (account 0371). Line 21 Long-term Receivables (position 22+23) Line 22 Long-term Receivables from Financial Leasing – indicate the total amount of receivables from financial leasing with a maturity longer than 1 year, reduced by the allowance for receivables (account 040). Line 23 Other Long-term Receivables – indicate other long-term receivables not previously mentioned, reduced by allowances (account 042). Line 24 Deferred Tax Assets – indicate deferred tax assets (account 191). Line 25 Current Assets (position 26+27+32+38) Line 26 Inventories – indicate the net value (after reduction for the amount of allowance) of small inventory, auto tires, and packaging (account 30), objects returned and seized from operating and financial leasing contracts, and other acquired assets (accounts 60, 61, and 62), as well as the acquisition value of financial leasing objects before activating the leasing contract and advances given to suppliers for financial leasing (accounts 66 and 67). Line 27 Current Receivables (position 28+29+30+31) Line 28 Receivables from Operating Leasing – indicate the amount of receivables from operating leasing, reduced by allowance (account 121). Line 29 Receivables from Financial Leasing – indicate the amount of due receivables and receivables from financial leasing with a maturity up to 1 year, reduced by the allowance for receivables (account 120). Line 30 Receivables from the State and Other Institutions – indicate the amount of receivables from the state and other institutions, receivables from employees, and other receivables, reduced by the amount of allowance (account 16). Line 31 Other Current Receivables – indicate the net amount (after reduction for the amount of allowance) of all other short-term receivables not previously mentioned (account 15), advances given to suppliers for the purchase of leasing objects (account 13), receivables from rent (account 17), and receivables from lease (account 18). Line 32 Current Financial Assets (position 33+34+35+36+37) Line 33 Investments in Subsidiaries, Associates, and Joint Ventures – indicate the total amount of short-term investments in subsidiaries, associates, and joint ventures, reduced by the amount of allowance (accounts 111, 112, and 113). Line 34 Investments in Short-term Securities – indicate the amount of placements in debt and equity securities with a maturity up to 1 year, reduced by the amount of allowance (account 115). Line 35 Short-term Loans Granted – indicate the total amount of due receivables from loans and undue receivables from loans granted with a maturity up to 1 year, reduced by allowance (account 116). Line 36 Short-term Deposits – indicate the amount of deposits with banks with a maturity up to 1 year, reduced by the amount of allowance (account 1170). Line 37 Other Short-term Financial Assets – indicate the value of short-term financial assets not previously mentioned, reduced by the amount of allowance (account 118), and guarantees with a return period up to one year (account 1171). Line 38 Cash in Bank and Cash on Hand – indicate the amount of cash funds in the account, in the cash register, and other cash funds, reduced by the amount of allowance (account 10). Line 39 Prepaid Expenses of Future Periods and Undue Revenue Collection – indicate the amount of prepaid expenses of future periods (account 190) and the amount of undue revenues (account 192). Line 40 Total Assets (position 1+25+39) Line 41 Off-balance Sheet Assets – indicate the total amount of off-balance sheet assets (accounts 990-994). Line 42 Capital and Reserves (positions 43+45+46+47+48) Line 43 Share Capital – indicate the total amount of share capital, i.e., share capital in joint-stock companies or capital in limited liability companies, as well as premiums on issued shares and stakes (account 90). Line 44 Of which owned by non-residents – indicate the part of share capital owned by non-residents (accounts 9002, 9003, and 9011). Line 45 Other Reserves – indicate revaluation reserves (account 95), statutory reserves (account 910), statutory reserves (account 911), reserves for buyback of own shares (account 912) and for bought-back own shares (account 913), other reserves (account 914), unrealized gains/losses on financial assets at fair value through other comprehensive income (account 93), and reserves arising from hedging transactions (account 94). Line 46 Capital Reserves – indicate the amount of capital reserves which include additional payments by members or shareholders of the leasing company into capital (account 915). Line 47 Retained Earnings/Carried Forward Loss – indicate undistributed profit, i.e., uncovered loss from the previous year (account 920). Line 48 Profit/Loss of the Current Year – indicate the amount of net profit or loss realized during the reporting period (accounts 921 and 929). Line 49 Provisions – indicate provisions for risks and expenses (accounts 28 and 98). Line 50 Long-term Liabilities (positions 51+52+53+54+55+56+57) Line 51 Liabilities for Long-term Credits and Loans from Foreign Banks and Financial Institutions – indicate liabilities based on received credits and loans from foreign banks and other financial institutions (affiliated and unaffiliated persons) with a maturity longer than 1 year (account 962), as well as liabilities for long-term loans from other foreign creditors (part of account 963). Line 52 Liabilities for Long-term Credits and Loans from Domestic Banks and Financial Institutions – indicate liabilities based on received credits and loans from domestic banks and other financial institutions (affiliated and unaffiliated persons) with a maturity longer than 1 year (account 961), as well as liabilities for long-term loans from other domestic creditors (part of account 963). Line 53 Liabilities for Leasing Advances – indicate liabilities for received advances with a maturity longer than 1 year (account 9650). Line 54 Liabilities for Leasing Deposits and Guarantees – indicate liabilities for received deposits and guarantees with a maturity longer than 1 year (account 9651). Line 55 Liabilities for Issued Securities – indicate liabilities based on issued debt securities with an original maturity longer than 1 year (account 966). Line 56 Other Long-term Liabilities – indicate other long-term financial liabilities (account 967) and other long-term liabilities (account 97). Line 57 Deferred Tax Liabilities – indicate deferred tax liabilities recognized in accordance with IAS 12 Income Taxes (account 291). Line 58 Short-term Liabilities (positions 59+60+61+62+63+64) Line 59 Liabilities for Credits and Loans from Foreign Banks and Financial Institutions – indicate liabilities based on received short-term credits and loans and current maturities of long-term credits and loans from foreign banks and other financial institutions – affiliated and unaffiliated persons (account 252). Liabilities based on received short-term loans and current maturities of long-term loans from other foreign creditors (part of account 253) are also listed on this position. Line 60 Liabilities for Credits and Loans from Domestic Banks and Financial Institutions – indicate liabilities based on received short-term credits and loans and current maturities of long-term credits and loans from domestic banks and other financial institutions – affiliated and unaffiliated persons (account 251). Liabilities based on received short-term loans and current maturities of long-term loans from other domestic creditors (part of account 253) are also listed on this position. Line 61 Liabilities for Short-term Securities – indicate liabilities for issued short-term securities with an original maturity up to 1 year (account 21). Line 62 Liabilities for Leasing Advances – indicate liabilities for received advances with a maturity up to 1 year (account 2550) and liabilities for received participation in financial leasing (account 2552). Line 63 Liabilities for Leasing Deposits and Guarantees – indicate liabilities for deposits and guarantees with a maturity up to 1 year (account 2551). Line 64 Other Short-term Liabilities – indicate the amount of liabilities not previously mentioned, i.e., liabilities to suppliers (account 22), liabilities to affiliated companies and liabilities based on joint activities (account 24), other short-term financial liabilities (account 256), liabilities for taxes, contributions, and other fees, liabilities from results, and other short-term liabilities (account 26), as well as liabilities for salaries, wages, and allowances (account 27). Line 65 Deferred Payment of Expenses and Revenue of Future Period – indicate amounts of deferred payment of expenses whose settlement will occur in the future period (account 290) and revenue of future periods (account 293). Line 66 Total Liabilities (position 42+49+50+58+65) Line 67 Off-balance Sheet Liabilities – indicate amounts of off-balance sheet liabilities (accounts 995-999). Line 68 Capital and Reserves (position 69+70) Line 69 Attributed to Holders of Parent Capital – amount of capital and reserves attributed to holders of parent capital, i.e., majority owners of the leasing company. Line 70 Attributed to Minority Interest – amount of capital and reserves attributed to minority interest.

4.2. Statement of Comprehensive Income I. General Instructions The Statement of Comprehensive Income shows all revenues and expenses as well as the financial result of the leasing company's business during the reporting period and the previous reporting period.

II. Instructions for Completing Specific Items Line 1 Interest Income (position 2+3+4) Line 2 Interest Income – Financial Leasing – indicate earned interest income realized based on financial leasing contracts, i.e., income at the agreed nominal interest rate and other income from agreed fees and commissions directly related to approved financial leasing contracts, which are charged to the recipient of financial leasing (account 7700). Income from fees for processing financial leasing contracts is also listed on this position. Line 3 Interest Income – Loans Granted – indicate earned interest income realized based on loan contracts, i.e., income at the agreed nominal interest rate and other income from agreed fees and commissions directly related to approved loan contracts, which are charged to the loan user (account 7701). Line 4 Other Interest Income – indicate income from interest on deposits and all other interest income (account 7702). Line 5 Interest Expenses (position 6+7+8) Line 6 Interest Expenses for Credits Received from Domestic Banks and Financial Institutions – indicate all interest costs (including fees and commissions, penalty interest, and interim interest) for received credits and loans from affiliated and unaffiliated domestic banks and financial institutions (account 7200). Line 7 Interest Expenses for Credits Received from Foreign Banks and Financial Institutions – indicate all interest costs (including fees and commissions, penalty interest, and interim interest) for received credits and loans from affiliated and unaffiliated foreign banks and financial institutions (account 7201). Line 8 Other Interest Expenses – indicate all other interest expenses (account 7203). Line 9 Profit/Loss from Interest (position 1-5) Line 10 Income from Fees and Commissions – indicate non-interest income from fees and commissions for services provided by the leasing company to clients without direct use of funds (account 771). Line 11 Expenses for Fees and Commissions – indicate non-interest costs from fees and commissions for financial services provided to the leasing company by domestic and foreign banks and other institutions (account 721). Line 12 Profit/Loss from Fees and Commissions (position 10-11) Line 13 Other Business Income (position 14+15+16+17+18+19) Line 14 Income Realized from Operating Leasing – indicate income arising in the reporting period based on operating leasing contracts (account 750). Income from fees for processing operating leasing contracts is also listed on this position. Line 15 Profit from Sale of Assets – Operating Leasing – indicate profit from the sale of assets after the regular expiration or termination of the operating leasing contract (positive difference between income from the sale of tangible assets in operating leasing (account 751) and the unamortized value of tangible assets in operating leasing and costs of sale of seized and returned leasing objects recorded in inventory (account 7300)). Line 16 Profit from Sale of Assets – Financial Leasing – indicate profit from the sale of assets based on the delivery of the leasing object to the leasing recipient and profit from the sale of the leasing object after the termination of the financial leasing contract (positive difference between income from sale based on delivery of the leasing object to the leasing recipient (account 760) and sale of the leasing object after termination of the financial leasing contract (account 761) and costs of purchase of sold leasing objects (account 7100) as well as costs of sale of seized and returned leasing objects recorded in inventory (account 7101)). Line 17 Profit from Reimbursable Costs Related to Leasing – indicate profit from pre-invoiced costs of maintenance, insurance, registration, and other reimbursable costs (positive difference between income from pre-invoiced costs (accounts 752 and 762) and related costs). Line 18 Profit from Exchange Rate Differences – indicate profit resulting from changes in exchange rates of foreign currencies in which the assets and liabilities of the leasing company are denominated (positive difference between positive exchange rate differences (account 772) and negative exchange rate differences (account 722)). Line 19 Other Income – indicate profit from investments in financial instruments (account 773), income from investments in joint ventures, associates, and subsidiaries accounted for at cost (account 775), income from dividends and shares in profit of unaffiliated companies (account 776), other financial income (account 779), income from reversal of provisions for expenses and risks (account 781), income from write-off of liabilities (account 782), surpluses (account 783), penalties, rewards, and similar income (account 784), profit from sale of other long-term assets (positive difference between income from sale of other long-term assets (account 780) and unamortized value of alienated and written-off other long-term assets (accounts 7301, 7303, and 7304)), and other income (account 789). Line 20 Other Business Expenses (position 21+22+23+24+25+26+27+28+29) Line 21 Loss from Sale of Assets – Operating Leasing – indicate loss from the sale of assets after the regular expiration or termination of the operating leasing contract (negative difference between income from the sale of tangible assets in operating leasing (account 751) and the unamortized value of tangible assets in operating leasing and costs of sale of seized and returned leasing objects recorded in inventory (account 7300)). Line 22 Loss from Sale of Assets – Financial Leasing – indicate loss from the sale of assets based on the delivery of the leasing object to the leasing recipient and loss from the sale of the leasing object after the termination of the financial leasing contract (negative difference between income from sale based on delivery of the leasing object to the leasing recipient (account 760) and sale of the leasing object after termination of the financial leasing contract (account 761) and costs of purchase of leasing objects (7100) as well as costs of sale of seized and returned leasing objects recorded in inventory (account 7101)). Line 23 Loss from Reimbursable Costs Related to Leasing – indicate loss from pre-invoiced costs of maintenance, insurance, registration, and other reimbursable costs (negative difference between income from pre-invoiced costs (accounts 752 and 762) and related costs). Line 24 Loss from Exchange Rate Differences – indicate loss resulting from changes in exchange rates of foreign currencies in which the assets and liabilities of the leasing company are denominated (negative difference between positive exchange rate differences (account 772) and negative exchange rate differences (account 722)). Line 25 Cost of Depreciation of Assets in Operating Leasing – indicate the cost of accrued depreciation in the reporting period for assets in operating leasing (account 430). Line 26 Cost of Depreciation of Other Assets – indicate the cost of accrued depreciation in the reporting period for other assets (accounts 431, 432, 436, and 438). Line 27 Personnel Costs – indicate personnel costs (account 47), employee expense allowances (account 450), costs of other material rights of employees (account 456), and costs of provisions for pensions and other liabilities to employees (account 420). Line 28 General and Administrative Business Expenses – indicate all costs related to the use of premises, equipment, furniture, and other tangible and intangible assets, i.e., all costs of materials and services of legal and natural persons with whom the leasing company regularly interacts in carrying out its activities (account 4), except for depreciation cost (account 43) and value adjustment (account 44) and personnel costs (accounts 47, 450, 456, and 420). Line 29 Other Expenses – indicate loss from investments in financial instruments (account 724), other financial expenses (account 726), other expenses arising during the reporting period (accounts 731, 732, 733, 734, and 735), costs of value adjustment of tangible assets (accounts 433, 434, 435, 437, and 439), and other value adjustments (account 44), loss from sale of other long-term assets (negative difference between income from sale of other long-term assets (account 780) and unamortized value of alienated and written-off other long-term assets (accounts 7301, 7303, and 7304)). Line 30 Profit/Loss from Other Income and Expenses (position 13–20) Line 31 Profit/Loss before Allowance Costs for Losses from Impairment (position 9+12+30) Re