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CONSOLIDATED ANNUAL REPORT 2010

GE Money Bank

132 GE Money Bank

Consolidated Annual Report 2010

CEO Statement

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Contents
1 CEO Statement 5 Key Statistics of GEM Group 7 Key Data Key Data on the Regulated Consolidated Entity Information about the shareholders The activities 13 Information on Supervisory Board Members Supervisory Board, Board of Directors and Management Information about Supervisory Board Members Information about the management 19 Report of the Board of Directors Report of the Board of Directors on Commercial Activity and the State of Assets Economic results 23 Key Financial Trends 27 Corporate Social responsibility at GE 31 Outlook for 2011 33 Report of the Supervisory Board 35 Independent Auditor’s Report to the Shareholders of GE Money Bank, a.s. 39 Reports on Relations between Related Parties GE Money Bank, a.s. GE Money Auto, s.r.o. 53 Consolidated Auditor’s Report and Financial Statements Consolidated balance sheet Consolidated off-balance sheet Items Consolidated profit and loss statement Summary of changes in consolidated equity 59 Notes to the Consolidated Financial Statements 87 Independent Auditor’s Report to the Shareholders of GE Money Bank, a.s. 91 Financial Statements of GE Money Bank, a.s. Balance sheet Off-balance sheet Items Profit and loss statement Summary of changes in equity 97 Notes to the Financial Statements of GE Money Bank, a.s.

CEO STATEMENT

Dear Shareholder, Clients, Business Partners, and Colleagues: The year 2010 saw recovery from the recent global economic crisis. However, the recovery is weak and marked by difficulties arising from persistent high unemployment and the need for public finance consolidation. In this challenging economic environment we stuck to our strategy. Thanks to this and the hard work of our colleagues we achieved good business results.

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GE Money Bank

Consolidated Annual Report 2010

CEO Statement

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GEM Group’s ratio of total adjustments to balance of non-performing loans stood at 75% reflecting our prudent approach. The liquidity position of our Bank remained very strong with a liquidity cushion of CZK 18.5 billion. Our capital adequacy is one of the highest in the Czech financial market. As of the end of 2010, the GEM Group had over CZK 21 billion of available high quality regulatory capital resources, and a capital adequacy ratio of 14.7%. Product and Service Innovations To address the requirements of our customers we maintained our track record of product innovations In order to provide our customers exceptionally straightforward and high quality products, we continued with the simplification of our group structure. Pursuant to management changes in 2009 and legal restructuring in 2010 of the GE Money entities in the Czech Republic, the customers, operations and assets of GE Money Multiservis, a.s. (GEMM) including the Multiservis brand were transferred to GE Money Bank a.s. (GEMB or the Bank) and GE Money Auto s.r.o. (GEMA). Since the restructuring, GEMA is a 100% owned subsidiary of GEMB. Post the restructuring, GEMM is no longer an operating entity and therefore as of 31 December 2010 is not included within the GE Money Bank, a.s. Regulated Consolidated Entity (the GEM Group and the RCE). This restructuring will improve our operational efficiency and effectiveness, and enable us to serve our customers better. We understand that direct contact with our customers We expect the economic environment to improve in 2011; however, we understand that the situation of our customers may remain tough due to necessary social and economic reforms. We therefore reaffirm our commitment to understanding the needs of our customers and to the responsible provision of services that our customers need and request. Business and Financial Results Our responsible and world class risk management 2010 was a successful year for us. The GEM Group net income reached CZK 4.1 billion. Additionally deposits helped us to navigate through the challenging macroeconomic environment. As of 31 December 2010 the and easy access to the Bank are essential and we continued to enhance our customer contact points. During 2010 we opened 15 new branches, increasing our branch network to 240 branches. Additionally, we expanded our ATM network by 24 to 649 ATMs. Of these 11 are deposit-taking, providing our customers with an easy way to deposit cash directly into their current accounts. A requirement of today’s society is to stay connected with families, friends and business partners. In line with our aim to be a real business partner for our clients, we expanded our online activities to cover social networks such as Facebook, Twitter and LinkedIn in order to open additional, modern communication channels. We believe that these alternative ways of communication Total unsecured personal loans to customers increased by almost 2%, reaching CZK 47.3 billion at the end of 2010. In a weak market we also increased loans to commercial customers by 3% compared with 2009, a performance that underlines the strength of our offerings in this segment. In the field of personal banking, we introduced a new credit card concept that addresses the needs of each individual customer. Moreover, our Bank expanded its portfolio of current account products by launching the award winning Genius Optimal account with special rewards to GEnius Optimal customers on their savings and mortgage products. In 2010, the number of deposit accounts held with our group increased by almost 18,000. The deposit base of our customers reached nearly CZK 110 billion, 1.4% higher than in 2009. The growing deposit base improved the GEM Group loan/deposit ratio to 108% from 111% in 2009. At the end of 2010, our Bank was the first player in the market to revolutionize fees for europayments. Our europayments fees are set at the same level as domestic payments, decreasing the operating expenses of our customers and delivering our goal of providing easier, clearer and more rewarding services. from our customers grew, and we maintained strong liquidity as well as capital adequacy. during 2010. In commercial banking we introduced 57 new products and product innovations. We established a “branch in the sky”, which enables our commercial customers to resolve their queries quickly via phone with professional bankers. We have thus created a unique new concept of commercial banking.

enhance options for matching the supply and demand for financial services, and bring our Bank even closer to our customers. We are very pleased that our customers have recognized our efforts to be an exceptionally straightforward and open bank by awarding our Internet Banking service the Public Prize for the best product in the Golden Crown 2010 competition. We have now won the award for two years in a row. Moreover, we are delighted to be honored with the award “Most Customer Friendly Bank of the Year 2010”. These recognitions motivate us to work even harder on further benefits and innovations for our customers. Corporate Social Responsibility As a major employer and contributor to the development of the Czech economy, we believe that we have a responsibility to contribute to the development of society by supporting socially responsible projects. As a result of our initiative in this area, we have two major programs focusing on equal opportunities and financial education. The project “Život nápadům” (“bringing ideas to life”) focuses on encouraging women to start their own businesses, and facilitates support for women embarking on entrepreneurial activities. We are very proud that our own gender diversity efforts have been recognized with second place in the “Company of the Year: Equal Opportunities” 2010 awards given by the Gender Studies Association. We also understand the need for providing financial education to our young generation, and for improving financial awareness generally within the Czech Republic. We sponsored the unique project “Rozumíme penězům” (understanding money), which focuses on bringing financial education to schools. This initiative was recognized by being proclaimed the second most beneficial activity of the year 2010 in the Fincentrum Bank of the Year contest.

Herbert CEO and Chairman of the Board of Directors GE Money Bank. We look forward to further mutually beneficial cooperation with our customers and business partners in 2011.s. Peter R.4 GE Money Bank Consolidated Annual Report 2010 Key Statistics of GEM Group 5 KEY STATISTICS OF GEM GROUP Conclusion I would like to take this opportunity to thank our Shareholder. . Our colleagues work hard to do a great job for our customers. Clients and Business Partners for their support and loyalty during 2010. and I am very proud of the great team we have. a. Therefore I would like to express a very special thanks to all my colleagues for their hard work during the last year.

000.6 GE Money Bank Consolidated Annual Report 2010 Key Data 7 Key Statistics of GEM Group Number of credit cards 252.000 1. 1.000 400. 1.000. 2010 (change in the composition of the Board of Directors) Capital stock: Paid up: CZK 510. a. 12.000 1.081.000 600.431 KEY DATA Number of deposits accounts 1. a. Vyskočilova 1422/1a. 2010 31.160.: Legal form: Date of registration: Date of the last change: GE Money Bank.248 Total number of clients 1. 2010 31.000 100 % .200.000 1.057 1.000 800.892 0 200. 2010 Basic details of GE Money Bank.s. 12.s. 140 28 Praha 4-Michle 25 67 27 20 Joint-stock company 9 June 1998 7. 12. (being the leading company within the GEM Group) as at 31 December 2010 Trade name: Registered office: Company ID no.142.048.524 294.263 1. 2010 Number of ATMs 649 625 Number of banks branches 240 225 0 100 200 300 400 500 600 700 1.

408 employees 3. 2010 Details of acquisition of the bank’s own shares and share warrants and other securities with an attached right to their exchange for shares: GE Money Bank.000.000 each Bank’s Supervisory Board Robert Charles Green Aleš Blažek Pavel Zídek Bank’s Board of Directors Peter Ronald Herbert Christoph Glaser Position Chairman of the Supervisory Board Supervisory Board Member Position held from 13.396 employees Details of increases in the bank’s capital stock: 25. does not hold any of its own shares or other similar securities. 2008 06.12. 05. a. 07.000 Branch offices Total Number of branch offices (as at 31. 2010 07. 2008 01. 2009 06. 12.2003 – an increase in the capital stock of CZK 10.s.3.988 employees 1. 06. Brett Matthew Belcher Rajesh Ramakrishna Gupta Jiří Báča Wade Udell Robison Number of bank employees (as at 31. 2009 20.2010): Headquarters 1. 2009 Supervisory Board Member elected by employees Position Chairman of the Board of Directors Member of the Board of Directors Member of the Board of Directors Member of the Board of Directors Member of the Board of Directors Member of the Board of Directors Position held from 10. 08. form and format of issued shares and their nominal value: 510 dematerialised ordinary inscribed shares with a nominal value of CZK 1.000.8 GE Money Bank Consolidated Annual Report 2010 Key Data 9 Type. 12. 07. 12. 04. 2007 26. 2010): 240 . 2009 10. 12.

Providing credit 18. Cheque services 15. 8. Information and consultancy services 21. exercising rights arising from the existence of the relevant investments and providing finance to these companies in the form of loans or otherwise of Act No.s. 7. Opening and administration of current. Providing banking information 22. Letter d) 100% share of voting rights (direct or indirect) 100% direct or indirect interest in the capital stock of companies within the RCE 6. Financial brokerage 12.10 GE Money Bank Consolidated Annual Report 2010 Key Data 11 Basic facts about the GEM Group’s ultimate shareholder Overview of the GEM Group’s activities Overview of activities arising from the banking licence Overview of the basic activities and services actually carried out by the GEM Group: In Czech Koruna: 1. Foreign exchange services 12. Foreign documentary letters of credit and collections 13. consumer and mortgage loans) Bill of exchange services Bank guarantees Acquisition of receivables Financial Leasing (car financing) GE Capital International Holdings Corporation Corporation Trust. Paragraph 3. Lease of safe deposit boxes 17. Discharge of the depository function 13. Opening and administration of current and time foreign currency accounts 11. Providing banking information 15. 3. Bank guarantees 16. Card services (according to types of cards) 20. Cheque services Bank books Domestic documentary letters of credit and collections Credit and business services (commercial credits. Smooth payments 14. Providing investment services including: Scope of business: Establishing subsidiary companies with seats outside the United States of America. 7. time and savings accounts in Czech crowns and related services 2.Trading in foreign-exchange values and gold on a client’s account 16. forfaiting Other products and services: 19. industrial strategy and other related matters. 3. 6. Acceptance of deposits from the public Providing loans Investment in securities on the bank’s own account Financial leasing Payments and settlement Issue and administration of means of payment Providing guarantees Opening letters of credit Ensuring collection of payments . suspended or terminated by the competent authority: N/A . 5. 256/2004 Coll. 9. 1209 Orange Street. 4. on conducting business activities on the capital market – advisory activities relating to the structure of capital.Trading in foreign-exchange values and gold on the bank’s own account . 10. 8. Trading in foreign-exchange values and gold on the bank’s own account or on a client’s account to the following extent: . Delaware United States of America 1. and providing advice and services associated with transformation of companies or transfer of enterprises 11. Factoring. 9. Foreign exchange activities (purchase of foreign-exchange resources) 14. a. Wilmington. In foreign exchange: 10. 4. Bill of exchange services 17. Exchange of bills and coins Overview of activities whose performance has been limited. 5. 2..supplementary investment service in accordance with Section 4. Activities directly related to activities listed in the banking licence held by GE Money Bank.

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GE Money Bank

Consolidated Annual Report 2010

Information on Supervisory Board Members

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INFORMATION ON SUPERVISORY BOARD MEMBERS

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GE Money Bank

Consolidated Annual Report 2010

Information on Supervisory Board Members

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Supervisory Board, Board of Directors and Senior Management Team of GE Money Bank, a.s. (being the leading company within GEM Group)

Information on Supervisory Board Members
Robert Charles Green graduated from the University of Maryland in USA. He joined GE in 1990 in the

Bank’s Supervisory Board Robert Charles Green Aleš Blažek Pavel Zídek

Position Chairman of the Supervisory Board Supervisory Board Member Supervisory Board Member elected by employees

Position held from 13. 07. 2009 10. 06. 2008 01. 12. 2009

European Manager Development Programme and since then he has worked in various management positions including Vice President & manager of GE Capitaľs audit staff, Chief Financial Officer of GE Healthcare in Great Britain and Chief Financial Officer GE Money – Americas. He currently works as a Vice President & Chief Financial Officer, GE Capital Global Banking. Since June 30, 2009 he is a member and since

Bank’s Board of Directors Peter Ronald Herbert Brett Matthew Belcher Christoph Glaser Rajesh Ramakrishna Gupta Jiří Báča Wade Udell Robison

Position Chairman of the Board of Directors Member of the Board of Directors Member of the Board of Directors Member of the Board of Directors Member of the Board of Directors Member of the Board of Directors

Position held from 10. 07. 2008 20. 12. 2007 06. 05. 2009 26. 08. 2009 06. 04. 2010 07. 12. 2010

July 13, 2009 also the chairman of the Supervisory Board of GE Money Bank, a. s. Aleš Blažek graduated from the Faculty of Law of Charles University and started working as a law clerk in White & Case in 1998. He worked as the Director of the Legal Department of Citibank in Prague from 2000 and became the Director of the Citibank Legal Department for Central and Eastern Europe in 2002. In 2004, he moved to London to work as the Deputy Director of the Legal Department for the EMEA region in Citigroup. He

Senior Management Team Peter Ronald Herbert Christoph Glaser Brett Matthew Belcher Rajesh Ramakrishna Gupta Jiří Báča Radka Pekelsá Tomáš Černý Manu Pal Rajaram Ramalingam Jonas Hasselrot Wade Udell Robison Thomas Broadhurst Dodd

Position Chief Executive Officer Chief Distribution Officer Chief Risk Officer Chief Financial Officer Chief Commercial Banking Officer Chief Human Resources Officer Chief Legal & Compliance Officer Acting Chief Marketing & Strategy Officer Chief Information Officer Chief Operations Officer Chief Products Officer Senior Internal Audit Manager

Position held from 26. 06. 2008 12. 02. 2009 01. 09. 2007 09. 02. 2009 05. 10. 2009 01. 06. 2010 12 .02. 2009 01. 10. 2010 01. 11. 2010 01. 05. 2003 01. 04. 2009 01. 05. 2007

has worked in GE Money as the Director of the Legal Department for Central and Eastern Europe since 2007 and he is now Chief Legal Counsel for GE Capital Global Banking. He is also a member of the Czech Law Association. Pavel Zídek graduated from the Czech Technical University in Prague and worked as an Information Technology Manager in various companies. He joined Agrobanka in 1991 and worked in various posts in the Information Technologies Department. Following the acquisition of Agrobanka by GE, he became the Senior IT Manager and later also a member of the Supervisory Board of GE Money Bank, a.s. elected by employees (elected by employees in 2001, 2005 and 2009).

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GE Money Bank

Consolidated Annual Report 2010

Information on Supervisory Board Members

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Information on members of the Board of Directors and Management
Peter Ronald Herbert joined GE with more than 30 years of experience in international banking, acquired mainly during his work in the Barclays Bank Group. The posts held in this group included the General Director of Barclaycard International, which he elevated to a leading player in the market, and the Financial Director of the banking division of Barclays UK. He also worked as the Group Strategy Director for Barclays Bank and held a number of other major posts in corporate and retail banking. Prior to joining GE Money Bank, a. s., he helded the position of the Deputy General Director of the National Bank of Kuwait Group. He has been the Chief Executive Officer of GE Money Bank, a.s. since 26 June 2008 and since 10 July 2008 also the Chairman of the Board of Directors. Christoph Glaser graduated from the Chinese University in Hong Kong, and then in economics at the Free University in Berlin and linguistics at Humboldt University in Berlin. He joined GE in 1997 in the European Manager Development Programme. From 1999, he held the position of Executive Audit Manager in GE Corporate Audit. During his more than 10-year career at GE, he has gathered considerable experience in many world markets – he has worked, for example, in Germany, USA, Russia, UK, and Japan. From December 2004, he worked as the CFO of GE Money Bank, a.s., and since February 2009, he has held the newly created position of Chief Distribution Officer. Since 2005, he has also been a member of the Management Board of GE Money Bank, a.s. Brett Matthew Belcher holds a Bachelor of Science (BS) degree in transitive economies and an MBA from Pittsburgh University. He commenced his professional career in the United States, where he worked for 7 years in the Business Supervision Office. He arrived in the Czech Republic in 1997 as the Citigroup’s VicePresident for risk analysis and management, and was later promoted to the post of the Risk Manager for retail banking in the Czech Republic. Prior to joining GE Money, he worked for two years in Raiffeisenbank as the Risk Manager for the Czech Republic. He also assisted Raiffeisen in establishing a risk management system in retail banking in Ukraine. He joined GE Money in 2006 as the Risk Manager for retail banking in the Central and Eastern Europe region and has held the post of the Chief Risk Officer of GE Money Bank, a.s. since 1 September 2007. Radka Pekelská joined GE Money as Chief HR Officer on June 1st 2010. She was previously HR Director for Tesco in the Czech Republic and Slovakia. She has over ten years HR experience with Tesco and was instrumental in driving growth in this very competitive industry. Tesco has over 200 stores in the Czech Republic and Slovakia and approximately 23,000 employees. In addition to leading the HR function at Tesco, Radka led change programmes within the company, resulting in improved results in employer brand image as well as reduced employee turnover. Jiří Báča brought with him a wealth of experience, both from retail banking and commercial banking. He has been working in this line of business for more than fifteen years. He started his banking career in Komerční banka, where he held various positions, both in retail and commercial banking. He then spent five years in HVB Bank, where he held increasingly responsible positions, including the positions of the Head of Commercial Clients’ Division and the Head of Distribution. In 2005, he left for Citibank, where he was appointed to the Board of Directors. As the Head of Sales and Distribution, he was responsible both for the retail and for the SME distribution. After a short stay in the Ukraine, where he worked for PPF Financial Group, he returned to Prague and became the CEO of mBank. From October 5, 2009, he has been the Chief Commercial Banking Officer of GE Money Bank, a.s. Since April 2010, he has also been a member of the Management Board of GE Money Bank, a.s. Ramalingam Rajaram attended the State University of New York and graduated with a Bachelor of Science degree in Computer Science. He has wide experience in Information Technology. Over the course of his career, he has held various leadership roles with responsibilities ranging from organizational development, enterprise wide software implementation, relationship management and project management. He has worked in several leading Information Technology companies, such as Siebel Systems, Lotus Development and Sybase. Prior to joining GE Money, Ram was the CIO at GE Commercial Distribution Finance, based in Hoffman Estates, USA. Since November 1st, 2010, he has held the position of the Chief Information Officer of GE Money Bank. Thomas B. Dodd graduated from Manchester Metropolitan University and Warwick University in the UK. He holds an MBA title and is also a qualified financial adviser. He has extensive experience, particularly in international banking and audit. Prior to joining GE Money Bank, a.s., he was responsible for bank inspections for the Central Bank of the United Arab Emirates. He joined GE Money Bank, a.s. in May 2007 as the Senior Internal Audit Manager. He is also a member of the Czech Club of Internal Audit Managers. Rajesh Ramakrishna Gupta holds Tomáš Černý is a graduate of the Faculty of Law of Charles University, with a number of study internships in the United Kingdom. Before joining GE Money Bank, Tomáš Černý worked at the Prague office of the international law firm Weil, Gotshal & Manges for five years. There he focused primarily on commercial law, banking, and mergers and acquisitions. Before joining Weil, Gotshal & Manges, Tomáš worked at the Deloitte & Touche consulting company for two years, and at the international law firm Clifford Chance. From April 2005, he was the Chief Legal Officer at GE Money Bank, a. s., and since February 2009 he has been the Chief Legal & Compliance Officer. Manu Pal is a certified The Chartered of Jonas Hasselrot previously worked

a Bachelor of commerce degree from Mumbai University, India and is also a graduate of the Institute of Cost and Works Accountants of India. He joined General Electric in 1994 on the Financial Management Program and worked in the Godrej-GE Appliances joint venture in India. Since then, he has held many different positions in the company in finance, at GE Capital in Stamford, USA, and in London, UK. Rajesh moved to GE Money Bank, a.s. from GE Money in London, where he worked as the Global Business Development Finance Leader. Since February 2009, he has held the position of the Chief Financial Officer of GE Money Bank, a.s. Since August 2009, he has also been a member of the Management Board of GE Money Bank, a.s.

as the head of the American Express travel centre in Stockholm. He managed more than 100 travel agents and was directly responsible for the results of the centre, which held a 40% share of the entire Scandinavian market. He subsequently held the post of Customer Service Director at the same company for Benelux and Scandinavia, and was responsible for the complete range of processes from customer service, customer retention, new product cross-selling to existing customers and loan approval to the collection of overdue payments. He has been the Chief Operations Officer of GE Money Bank, a.s. since 1 May 2003. Wade Udell Robison studied international finance at Brigham Young University in Utah, USA. He has profound knowledge of banking and financial services, which he gained during his many years in the Citigroup banking group, where he held a number of management positions. In 1997, he started as a branch manager in the USA; in 2000, he transferred to the position of product manager in Citibank Hungary; and in subsequent years, he held the positions of Country Business Manager and Head of Assets in Hungary, Romania, and Poland. Since April 2009, he has been the Chief Products Officer of GE Money Bank, a.s. Since December 2010, he has also been a member of the Management Board of GE Money Bank, a.s.

Accountant

from

Institute

Chartered Accountants for India. Prior to joining General Electric he worked with PricewaterhouseCoopers and Deloitte in India. He has been with GE for eleven years and is experienced in finance, marketing and strategy functions. He joined GE Money Bank, a.s. in 2005 and from October 2010 he has been the Acting Chief of Marketing & Strategy Division.

continued to pursue its business strategy of providing comprehensive financial services to individuals and small and medium-sized enterprises. Blažek. Zídek REPORT OF THE BOARD OF DIRECTORS Chief Executive Officer P. Glaser. Robison B. Glaser Risk Division Chief Risk Officer B. J. W. Gupta. Hasselrot Products Division Chief Products Officer W. R. Pal. M. R.s. P. a. R. R. Acting Information Technologies Division Chief Information Officer R. Robison Report of the Board of Directors on Business Activities and the State of Assets During 2010. clearer and more rewarding to customers. R. Pekelská Legal & Compliance Division Chief Legal & Compliance Officer T. Černý Marketing & Strategy Division Chief Marketing & Strategy Officer M. U. Herbert Internal Audit Department Senior Internal Audit Manager T. C. . Rajaram Operations Division Chief Operations Officer J. Dodd Distribution Division Chief Distribution Officer Ch. Báča Human Resources Division Chief Human Resources Officer R. B. GE Money Bank. Belcher Finance Divison Chief Financial Officer R. Herbert. Belcher. Ch. Green. Gupta Commercial Banking Division Chief Commercial Banking Officer J. M. Báča Supervisory Board R.18 GE Money Bank Consolidated Annual Report 2010 Report of the Board of Directors 19 Organisation Chart (as at 31 December 2010) Board of Directors P. A. U. based on the principles of being easier.

The Board of Directors of GEMB is satisfied with the results that the Bank and the GEM Group achieved in 2010 in an improving economic environment. As at 31st December 2010. As at 31 December 2010.6% year-on-year and amounted to CZK 6. GEMA is a 100% owned subsidiary of GEMB. at CZK 7.7 billion (Tier1 regulatory capital CZK 21 billion] at the end of 2010.000 80.836.000.177. During 2010 GEMB invested into establishing and opening 15 new branch offices and 24 new ATMs.s.000 60.s. (GEMM) including the Multiservis brand were transferred to GE Money Bank.459* 147. The Directors would like to thank our customers for their loyalty.000.9% to over CZK 47 billion. Net of Adjustments (CZK 000) 118.000.000. a. a.615.000 40.6 billion. amounted to CZK 22.000 140.000 120. our partners for their support and all employees for their hard efforts.000 Capital Adequacy 14. a. Auto loans account for most of the assets of GEMA.000 160.141 Loans to Clients. Credit card receivables (as part of the merged Bank) grew by 3. The GEM Group’s total equity reached CZK 25. GEMM no longer pursues any business activity and is therefore not included within the GE Money Bank.000.s.069. s. Outstanding mortgage loans.7%.035 Total Assets (CZK 000) 140. with a strong capital adequacy ratio of 14.8 billion. the gross value of the GEM Group loans to customers stood at CZK 118.r.20 GE Money Bank Consolidated Annual Report 2010 Report of the Board of Directors 21 Pursuant to management changes in 2009 and legal restructuring of the GE Money entities in the Czech Republic in 2010.73 %* 19. Main Financial Indicators Consolidated economic results and selected key economic indicators (According to Czech Accounting Standards) Due to Customers and Corporate Funding (CZK 000) 110. achieving a year-on-year increase of 1. (GEMA). as at 31 December 2010. Unsecured consumer loans increased by 1. the customer and operating assets of GE Money Multiservis.000 100.07 % 0 5 10 15 20 25 2009 2010 * Capital adequacy and total assets decreased as a result of the legal restructuring and the exclusion of GEMM from the GEM Group financials as of 31 December 2010. The growing deposit base improved the GEM Group loan/deposit ratio to 108% from 111% in 2009.4 billion.023. (GEMB or the Bank) and GE Money Auto. client deposits reached over CZK 110 billion. and loans to commercial clients stood at CZK 29.1 billion at the end of 2010.o.962 0 20.000.000. . Since the restructuring.4%. Regulated Consolidated Entity forwards (the GEM Group).000.056.309 108.003 120.6 billion.

958 11.069 3.32% The legal restructuring in 2010 results in incomparable information for the current and preceding periods in certain components of the financial statements.191 26. 12.806.025 10.191 19.140.427.00 % 22.249.000 4.808.00 % 0.763 1.66 % 18.64 % -100.396 1.96 % 3.90 % -41.722 0 -1.46 % 9.97 % Total capital requirement (CZK 000) Capital requirement for credit risk (CZK 000) Capital requirement for operational risk (CZK 000) 11.276 -1.241 1.979 15.492 11.357 1.000 4.000 4.840 510.623.000 102.22 GE Money Bank Consolidated Annual Report 2010 Key Financial Trends 23 Selected Key Business Indicators 31.525 0 -0.685 31 December Year-on-year Year-on-year 2009 change change Stand-alone GEMB -9. 2010 31.520 41.283 21.238.067 1.603 52.17% 2.77% GEMB 15.97 % 48.485 figures -22.26 % 21.235 7.283 21.191 10.804 510.07 % 26.453.584 9.171.73 % 21. 12.402 1. 12.00 % 0.701.14 % 9.73 % KEY FINANCIAL TRENDS Registered capital stock in the Commercial Register (CZK 000) Required reserve funds (CZK 000) Share premium (CZK 000) Retained earnings from previous periods (CZK 000) Intangible fixed assets other than goodwill (CZK 000) Minority interest (CZK 000) -1.840 0.625.607 1.979 17.292.000 102.916 8.726.791.669 2. 2010 GEM Group Return on Average Capital Return on Average Assets Administrative Expenses per Employee (CZK 000) Assets per Employee (CZK 000) Net Profit per Employee (CZK 000) Number of employees 1.70 % n/a 510.690.566.294 2.565.804 510.90 % 19.73 % -41.701. 2010 31 December GEM Group 2010 Stand-alone GEMB Capital adequacy Tier 1 (CZK 000) Tier 2 (CZK 000) Total of regulatory capital (CZK 000) 14.519.163.860 15.000 4.056.367.646 15.89 % Stand-alone Consolidated GEMB 16.79 % -19.518.97 % 0.344 19. no comparisons are presented.47 % -19.204 3.979 15.061 1.244.489 0 -929. .000 102.75 % 31.087 17.099.70 % 9.46 % 21.26% 2. 12.216 2.00 % 13.367.849 9.701.00 % 0.590. 2010 GEM Group 31. Therefore.306.00 % 0.847 840.452.000 102.238.51 % 13.

000 64.000 90.500 4.242 1.000 2.000 61.400 51.949 1.973 250 240 300 Number of Branches 201 200 187 185 192 209 214 219 225 Net Profit (mil.000 3.000 71.000 108.428 47.000 0 2002 2003 2004 2005 2006 2007 2008 2009 * 2010 * 45.000 10.000 20.254 2.000 500 0 2002 2003 2004 2005 2006 2007 2008 2009* 2010* 0 911 50 2.089 4.782 51. 2008 was CZK 4.000 147.000 30.673 2. 2009 and 2010 and for the period then ended represent consolidated figures.500 3. CZK) *Including items related to the credit agreement provided by the parent company GE Capital International Holdings Corporation.397 3. where drawn balance as at the close of business on December 31.500 1. CZK) 150 100 2002 2003 2004 2005 2006 2007 2008 2009 * 2010 * 120.000 84.156 2.957 70. As at December 31.000 1.615 Due to Customers and Corporate Funding (mil.299 2.711 72.000 Total Assets (mil. 2009.177 110.878 .000 41.000 80.000 110. CZK) *The figures as at December 31.875 80.24 GE Money Bank Consolidated Annual Report 2010 Key Financial Trends 25 Key Financial Trends (According to Czech Accounting Standards) 160.163 60.919 2.342 Average Headcount 2.s.000 4.396 120.000 1.056 140.500 2.5 billion (December 31.500 1.056 2. 2007: CZK 5 billion).783 98.556 2.411 40.500 3.000 20.559 45. 100. 100.000 57.366 2.028 2.000 50.500 40.024 140.988 2.000 500 0 2002 2003 2004 2005 2006 2007 2008 2009 * 2010 * 0 2002 2003 2004 2005 2006 2007 2008 2009 * 2010 * 4.806 59.046 3.000 1.000 3. the bank fully repaid the loan.112 60. Prior periods represent only the stand-alone figures of GE Money Bank. a.000 3.

26 GE Money Bank Consolidated Annual Report 2010 Corporate social responsibility at GE 27 CORPORATE SOCIAL RESPONSIBILITY AT GE Corporate social responsibility is a significant component of the overall GE Money strategy in the Czech Republic and is based on 4 pillars. .

The project is provided by the civic association AISIS.000 47. educational centres.28 GE Money Bank Consolidated Annual Report 2010 Corporate social responsibility at GE 29 CSR Suitable participants in this programme might be organisations or other legal entities that work with children or adults suffering health or social disadvantages. and with repairs to orphanages. Pilsen. GE Money volunteers are actively involved in the project as specialist consultants and lecturers Czech Republic has initiated a programme providing support for those in need.000 45. designed for Facebook. Fifty-nine projects of regional assistance were made possible on the basis of grants we provided.Š a MŠ Česká Lípa.s. training centres. and aids the integration of various social groups into society via the associations supported.122. The training is given in the form of day-long projects or in individual hours during the school year. investments. Liberec and Vysočiny.957. facing increased accommodation costs. civic association Town of Prachatice Civic association for the support and assistance of physically handicapped children Vyšší Hrádek. etc.000 79. by awarding it second place in the Most Beneficial Activities category in the Bank of the Year 2010 competition. land reclamation projects. civic association. p. It aims to improve the level of financial literacy of school children by means of specialised tuition in schools.087 40. They allowed handicapped people to buy essential healthcare equipment. Elementary school pupils (11 – 15 years old) form the primary target group. An important aspect of financial education is an examination of responsible decision-making. foster care centres. WOMEN ENTREPRENEURS PROJECT orphanages. The general public showed its appreciation of the project The project “We Understand Money” is an integrated programme which allows junior schools to effectively expand their syllabus into the sphere of financial education and to participate in increasing the financial literacy not only of pupils and staff.000 50. running seminars for teachers. Balkán Municipal Hospital Ostrava.000 100. So far more than 60 schools and over 2. In 2010 funds were provided to organizations supporting abandoned or sick children and handicapped people.000 40.p.000 50. but indirectly of parents as well. 2) Regional grant programme providing support to those in need In line with GE global strategy.185 40. 1.000 pupils have joined the project from five regions: Central Bohemia.s. elementary schools. GE VOLUNTEERS ORGANIZATION 4.Pr. libraries.European handbike circuit Break Through Silence Foundation Fund SK Akáda Jánské Lázně Spastic Tricycle sport club Orphanage and school canteen. REGIONAL GRANT PROGRAMME SUPPORTING THOSE IN NEED 3. ADRA civic association ZŠ. The principles of the “We Understand Money” project were used by GE Money in 2010 to develop the game “Money Genius”. the GEM Group in the The project trains second-level elementary school teachers to effectively familiarise their pupils with the principles of handling money and the basic range of financial products and services. not-for-profit Grants for 2010: Applicant Prosaz. .783 95. Pardubice.s.000 48. booking a holiday.000 40. Naděje. buying a car. an organisation receiving contributions from the state budget Other organisations Total Subject of grant Construction modifications to a convalescence and rehabilitation centre “Celebrations of the golden salt trail” “Family holiday” Equipment for HQ Aid to HAITI Compensatory aid for children with severe physical handicap Hippotherapy for the handicapped Utilisation of the space of a garden for clients – construction of a summer house Support for a contest for handicapped sportspeople Support for programme of cochlear implantations Support for mono-skiers (physically handicapped) Support for the activities of sportspeople with severe physical handicaps Contribution to the operations of the orphanage Construction of a playground for handicapped children Amount provided 55.000 105. middle schools or universities. which is mainly focused on offering assistance to disadvantaged children and adults as well as educational and environmental projects. It was created at the instigation of GE Money Bank and has become an integral part of the bank’s strategy in the sphere of “responsible lending”. ASK ELNA . GE Money Bank brings financial expertise and is one of the project designers. From 2008 to 2010 the civic association AISIS received support of CZK 27 million from the European Social Fund for realisation of the project in these regions. p. ALKA o.).190 1. Pupils learn this as though they were members of model households resolving practical situations occurring in normal life (finding accommodation.o. Plumov. The projects assisted handicapped children in their schools and their out-of-school activities. In 2010 GE Money donated almost CZK 2 million as part of the grant programme. FINANCIAL EDUCATION PROJECT 2.000 1. organisations operating in these spheres. etc. Youth and Sports.245 1) Financial education project “We Understand Money” This is a unique project which has accreditation from the Ministry of Education.

marketing. The aim of the initiative in the Czech Republic is to support women who have decided to start their own business. Real-life stories from women who run their own business are a huge inspiration for all women who are wondering whether to take their first business step. GE Volunteers focus on the following four main spheres of activity: • Children and education • Assistance to disadvantaged citizens • Senior citizens • The environment It cooperates with many elementary and middle schools. . These specialist seminars. Seminars.693 hours. with provinces progressively getting stronger. The strongest volunteer bases are in Prague and Ostrava. The patrons guarantee the total independence of the project and are an inspiration for women who are only just beginning their business activities. and new business opportunities. In the Czech Republic the organisation GE Volunteers was founded in 1999. “Bringing Ideas to Life” – is a community of women that provides a source of practical advice.zivotnapadum. allowed women to acquire practical advice on the topic of taxes. orphanages.cz. This represents an 86% increase in the number of volunteers year-on-year and a 44% increase in the number of volunteering hours. important reforming steps. or improving operations. It offers women a forum for discussion and the sharing of advice and ideas. and practical assistance In 2010 GEM Group organised two seminars where specialists from the bank as well as successful businesswomen and representatives of non-profit organisations participated. homes for elderly people and other nonprofit organisations around the whole of the Czech Republic. These women are experts who help specify the direction and programme of the project. The organisation brings together volunteers from the ranks of employees and with their assistance provides support in various spheres and places around the entire world. in 8 countries. share their ideas and concerns. links and news and reports from the market. on which 789 volunteers spent a total of 8. It offers help in national parks. featuring genuine experts in their field. In 2010 it organised a total of 89 initiatives. company financing. The majority of economic analysts agree that the year 2011 will bring moderate economic growth. It also contains practical advice and tools. forests and river basin regions and regularly organizes blood donation drives.30 GE Money Bank Consolidated Annual Report 2010 Outlook for 2011 31 3) GE Volunteers organisation GE Volunteers plays a key role in GE´s charity activities. Successful women inspire The project is overseen by an Advisory Board of patrons comprising women who have achieved success in many spheres. which allows women to discuss issues online. OUTLOOK FOR 2011 4) Project supporting women in business “Bringing Ideas to Life” The project entitled “Bringing Ideas to Life” is part of a global programme called Banking on Women organised by GE Capital. useful documents to be downloaded. tools and instruction on how to begin in business. webinars. such as tips on how to begin doing business. and to promote female role models in the business sphere. The project´s aim is to tell these stories and support women in taking this most important first step. especially of the pension and tax systems. and ask about anything that interests them. Dynamic Internet community A key communication platform for the project is the interactive website www. the parent company of GE Money Bank.

in 2011 we will continue to implement our strategy by introducing new product innovations and simplifications. strengthening our relationship with current customers and building a credible base for new ones.32 GE Money Bank Consolidated Annual Report 2010 Report of the Supervisory Board 33 REPORT OF THE SUPERVISORY BOARD We share the view that the economic environment will improve. We will also focus on further expanding our network of branches and ATMs to provide our customers more contact points. our portfolio of sound products fulfills all necessary conditions for future success. . and maintaining prudent risk management policies. Together with prudent risk management and responsible sales staff. but we expect the recovery to continue at a relatively slow pace. Peter R. a. We will also continue in our social activities. At the same time we will stay customer focused. Our strong capital and liquidity positions as well as the high level of expertise of our colleagues give us a lot of potential for long-term sustainable organic growth. Herbert CEO and Chairman of the Board of Directors GE Money Bank. Therefore. enhancing current beneficial programs and putting more effort into our brand recognition. I am confident that we are prepared to manage the challenges that 2011 has in store for us and thereby to strengthen our market position.s.

S. the Bank’s Articles of Association. Robert Charles Green Supervisory Board Chairman Aleš Blažek Supervisory Board Member Pavel Zídek Supervisory Board Member elected by the employees .s. and came to the following conclusion to be presented to the company’s General Meeting . a. The Supervisory Board discussed the 2010 results of the Bank and the Regulated Consolidated Entity as detailed in the financial statements. The Board of Directors of GE Money Bank.“The Supervisory Board recommends that the General Meeting approve the financial statements for 2010”. and the Board’s rules of procedure. 35 The Supervisory Board carried out its tasks in accordance with the law of the Czech Republic. provided all materials and information necessary for the Board’s supervisory activities. a. INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS OF GE MONEY BANK. including the attachments verified by the auditing firm KPMG.s.34 GE Money Bank Consolidated Annual Report 2010 Independent Auditor’s Report to the Shareholders of GE Money Bank. A.

for the year ended 31 December 2010. We conducted our review in accordance with Auditing Standard No.” KPMG Česká republika Audit. 20th April 2011 KPMG Česká republika Audit. s.s. Opinion In our opinion. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. IČ 49619187 DIČ CZ699001996 report is the responsibility of the Company’s statutory body. a. 56 of the Chamber of Auditors of the Czech Republic. Pobřežní 648/1a 186 00 Praha 8 Česká republika Telephone Fax Internet +420 222 123 111 +420 222 123 100 www. a Czech limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative („KPMG International“). for the for the year ended 31 December 2010 contains material factual misstatements. a. vložka 24185. a. in all material respects. Consolidated financial statements On the basis of our audit. including the assessment of the risks of material misstatement of the consolidated financial statements. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the consolidated financial statements are free from material misstatement. o. Information about the company is set out in Note 1 to these consolidated financial statements. on a test basis. and the notes to these consolidated financial statements including a summary of significant accounting policies and other explanatory notes. consistent with the audited consolidated financial statements. a.36 GE Money Bank Consolidated Annual Report 2010 Independent Auditor’s Report to the Shareholders of GE Money Bank. Obchodní rejstřík vedený Městským soudem v Praze oddíl C. on 20th April 2011 we issued an auditor’s report on the Company’s consolidated financial statements. This standard requires that we plan and perform the review to obtain limited assurance as to whether the report on relations is free of material misstatement.s. o. s. and the income statement for the year then ended. In making those risk assessments. The procedures selected depend on the auditor's judgment. which comprise the balance sheet as of 31 December 2010.. of the factual accuracy of information. s. whether due to fraud or error. This annual Auditor's Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. revenues and net result for the year then ended in accordance with Czech accounting legislation. Prague.r. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.kpmg. the auditor considers internal controls relevant to the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances. in all material respects. as well as evaluating the overall presentation of the consolidated financial statements.s. 37 Auditor’s Report KPMG Česká republika Audit. a Swiss entity. Annual report We have audited the consistency of the annual report with the audited consolidated financial statements.o. r. a. We conducted our audit in accordance with the Act on Auditors and International Standards on Auditing and the relevant guidance of the Chamber of Auditors of the Czech Republic. a. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management. In our opinion. Our responsibility is to express our opinion on the consistency of the annual report with the audited consolidated financial statements based on our audit. the information disclosed in the annual report is. but not for the purpose of expressing an opinion on the effectiveness of the entity's internal controls. is responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with Czech accounting legislation and for such internal controls as the statutory body determines are necessary to enable the preparation of consolidated financial statements that are free from material misstatement. accordingly. and thus provides less assurance than an audit. Our responsibility is to express our view on the report on relations based on our review. Pavel Závitkovský Partner Licence number 69 . whether due to fraud or error. Those standards require that we plan and perform the audit to obtain reasonable assurance that the information disclosed in the annual report describing matters that are also presented in the financial statements is. We have not performed an audit of the report on relations and. Vladimír Dvořáček Partner Ing. which are included in this annual report. The responsibility for the preparation and factual accuracy of this report rests with the Company’s statutory body. r.s. and of its expenses. Licence number 71 Ing. We believe that the audit we have conducted provides a reasonable basis for our audit opinion. and our report was as follows: “We have audited the accompanying consolidated financial statements of GE Money Bank.s. We conducted our audit in accordance with the Act on Auditors and International Standards on Auditing and the relevant guidance of the Chamber of Auditors of the Czech Republic. Based on our review. A review is limited primarily to inquiries of the Company’s personnel and analytical procedures and examination. nothing has come to our attention that would lead us to believe that the report on relations between The statutory body of GE Money Bank. Statutory Body's Responsibility for the Consolidated Financial Statements Report on relations between related parties We have reviewed the factual accuracy of the information disclosed in the report on relations between related parties of GE Money Bank.s. we do not express an audit opinion. as of 31 December 2010. related parties of GE Money Bank.s.cz Auditor’s Report (continued) Independent Auditor’s Report to the Shareholders of GE Money Bank. a. consistent with the audited consolidated financial statements.. the consolidated financial statements give a true and fair view of the assets and liabilities of GE Money Bank.

38 GE Money Bank Consolidated Annual Report 2010 Report on Relations between Related Parties 39 REPORT ON RELATIONS BETWEEN RELATED PARTIES .

140 28 GE Money Bank. The Bank also co-operated with Multiservis as part of Contracts for consideration . 1. s.r. a. Prague 4.s. Vyskočilova 1422/1a.s. a. Prague 4. Promotion As of 14. 140 28 100 % 100 % 100 % 100 % GE Money Bank. 513/1991 Coll. a report was compiled on relations between the company GE Capital International Holdings Corporation. Prague 4. a. the deal whereby the clients of Multiservis would use the Bank’s distribution channels. GE Money Multiservis.. a. a.. The costs per card are revalued once a year on the basis of the actual costs and the Bank’s profit margin. 513/1991 Coll.r. 207/84.s.o. a. (hereinafter referred to as the “Controlling Party“) as the Controlling Party and the company GE Money Bank.o. 140 28 GE Money Auto.r. 140 28 GE Money Bank. These are namely mandate contracts with companies having their registered offices in the Czech Republic and the Slovak Republic. GE Money. on the basis of which the company invoiced a proportional part of the costs to the Bank. is the contract on the use of GE’s logo and trademark. as amended.r. Multiservis paid the Bank a fixed fee per credit card issued and evidenced for these services and also Contracts with subsidiary companies of GE 100 % GE Money Bank.r. from which liabilities ensue. 370 21 GE Money Auto. Vyskočilova 1422/1a.s. (SR) GE Money Bank. a. a. 140 28 Contract on a bank overdraft loan Contract on a bank overdraft loan Mandate contract claiming of debtors’ receivables SB0000967 Contract on Cooperation. .s. Prague 4. Inc. Prague 4. 7. 140 28 GE Money Auto. s. as amended.r. 140 28 GE Money Bank.r. s. 140 28 GE Money Bank.s. s.o. GE Capital (Czech) Holdings.r. (hereinafter referred to as the “Controlled Party“ or “Bank“) as the Controlled Party This report was compiled in order to meet the information duty under paragraph 9 of Section 66a of Act No. a. (SR) GE Money Bank. distribution and processing of transactions made on the GE Money Card Maestro/MasterCard 100 % credit card. which they provide to the departments at the headquarters and management of the Bank.r.s. may make cash withdrawals at the Bank’s counters. a multinational GE corporation. Vyskočilova 1422/1a. The Bank has also concluded contracts on receiving support services from GE in Dublin and Stamford.s.o. The Bank provided administration services with respect to individual credit cards.s.o. SB0003693 Contract on the provision of IT Services – in connection with AS 400 SB0000484 Mandate contract SA0000018 100 % GE Capital International Holdings Corporation Global Consumer Finance GE Money Bank. The Bank co-operates most closely with its affiliated companies within the GE group of companies. Vyskočilova 1422/1a. which focuses on providing financial services. a.40 GE Money Bank Consolidated Annual Report 2010 Report on Relations between Related Parties 41 GE Money Bank. a. 140 28 GE Money Auto. Vyskočilova 1422/1a.s.o. Prague 4. Prague 4. Vyskočilova 1422/1a. Prague 4. s. Vyskočilova 1422/1a.s.r. 140 28 100 % Inkasní a exekuční servis s. Another type of contract.r.. In return. It administered and managed the whole portfolio in its Vision Plus General Electric Capital Services. (hereinafter referred to as ”Multiservis“) in the area General Electric Company of keeping. 100 % AgroConsult Bohemia s. Vyskočilova 1422/1a. s. a. Prague 4. INTERCONNECTION OF PARTIES The Bank also co-operated with GE Money Multiservis. SB0001835 Contract on the provision of IT Services SB0002374 Contract on the provision of Services: operation and supervision over IBS90 and SWIFT. Vyskočilova 1422/1a. Rudolfovská tř. who hold an OK card. 140 28 100 % General Electric Capital Corporation Inkasní a exekuční servis s. which use each other’s distribution networks to provide their products at arms-length business conditions. Multiservis paid the Bank a fixed fee per transaction made. České Budějovice. 140 28 GE Money Bank. Multiservis clients.receivables/liabilities The Bank concluded the contracts listed below with companies in the GE group. is part of the GE Capital group.s.. 140 28 GE Money Auto. the Commercial Code.s. 100 % 100 % GE Money Auto.o.. mainly to retail and medium-sized clients. s.s.o. 140 28 Inkasní a exekuční servis s.o. a. Training. the Commercial Code. s. Vyskočilova 1422/1a. Vyskočilova 1422/1a. Prague 4. a. 140 28 AgroConsult Bohemia. a.s. a. Prague 4. GE Money Brokers. In accordance with paragraph 9 of Section 66a of Act No. under which liabilities ensue to it. Prague 4. Vyskočilova 1422/1a. 2008. Vyskočilova 1422/1a. system. Vyskočilova 1422/1a. LIST OF OTHER CONTRACTS AND LEGAL ACTS (a) List of contracts for individual transactions made on these credit cards. 2. The Bank concluded a contract with companies in the GE group pertaining to the realisation of transaction on the money market according to the Bank’s instructions and on the Bank’s account. Prague 4.r. and between the Controlled Party and other parties controlled by the Controlling Party for the accounting period from 1 January 2010 – 31 December 2010. Vyskočilova 1422/1a.o. Prague 4.o.s.o. Prague 4.

s. a.s. a. amendment SB0004314 Rental of meeting rooms SB0003485 GE Money Bank. USA General Electric Capital Corporation. Andherl (East). USA General Electric Copany. CT 06484-08621 USA E-mail service SB0002514 Contract on the use of SW (licensing fee) SB0002521 Global contract between GE a INDUS Contract on software use – INDUS SB0002518 Global contract between GE a INDUS SB0002515 Contract on the maintenance of telecommunication and security equipment for data transmission SB0002516 Implementation Flexcube@connect SB0000696 GE Money Bank. Vyskočilova 1422/1a. a. a.s. Vyskočilova 1422/1a. Prague 4. 140 28 GE Money Bank. 140 28 GE Money Multiservis.s. England Great Ship street. Prague 4. 140 28 GE Money Multiservis. London. Vyskočilova 1422/1a. Prague 4. Vyskočilova 1422/1a. Stamford.s. Fairfield. Ltd. 140 28 GE Money Bank. 140 28 GE Money Bank. a. USA and Global eXchange Service. GE Money Bank.SB0002603. 120 Long Ridge Road. Summer Street 1600. a. 140 28 GE Money Multiservis.. Stamford.s. USA. Prague 4.s. Inc (Telindus). Prague 4. a. 140 28 GE Money Bank.s. a. a. a.s. Vyskočilova 1422/1a. United Nos. Netherlands General Electric Capital Corporation Summer Street 1600. Prague 4. Prague 4. USA and i-flex solutions. 140 28 GE Money Bank. Prague 4. Prague 4. 260 Long Ridge Road.B0002604 Contract on the provision of accounting services SB0003694 Business co-operation contract – No financial settlement ensuing SM0000266 Contract on the provision of Services SB0001356 Contract on a bank overdraft loan Contract on Cooperation – hypo referal SB0002600 Contract on Cooperation and processing personal data – hypo processing. a. 140 28 GE Money Bank. Bratislava.s. Vyskočilova 1422/1a. Vyskočilova 1422/1a. United Nos. Cons. 140 28 GE Money Bank. a. 359 + Model Colony.s. 201 High Ridge RD. SDF1. Vyskočilova 1422/1a. a.s. Prague 4. SDF1. Vyskočilova 1422/1a. 140 28 GE Money Bank.s. Bratislava. USA GE Capital Corporation. 140 28 GE Money Bank. Prague 4. Prague 4. Stamford. Vyskočilova 1422/1a.s. Utrecht. SB0002603 Contract on the provision of IT Services SB0002579 Contract on Cooperation in the personal data processing OPTIMAL BUSINESS Loan SB0002383 Contract on the provision of Services (state of vehicle. Prague 4. Prague 4. Ireland General Electric International. Prague 4. INC Shelton.s. Vyskočilova 1422/1a. 140 28 GE Money Bank. 140 28 GE Money Multiservis. Vyskočilova 1422/1a. USA GE Money EMEA 6 Agar Street.s. Slovakia GE Money. Ltd. Bottova 7. Prague 4. Prague 4. Vyskočilova 1422/1a.s. a.s. Vyskočilova 1422/1a. Savannahweg 19. registration certificates) SB0002601 Mandate contract Mandate contract Contract on a bank overdraft loan Contracts with other companies within the GE group (continued) GE Money Bank. Slovakia GE Austria GmbH. a..s. Stamford CT 06927 General Electric Capital Corporation. a. a. Vyskočilova 1422/1a. 140 28 GE Money Multiservis. USA-Gl. 777 Long Ridge Road. Bratislava. 140 28 Use of trademarks SB0002523 Fees for mediation of services V+ SB0002517 Contract on the provision of support to HQ GEMB SB0002486 Contract on the provision of support to HQ GEMB – IT services SB0002485 . Prague 4. Prague 4. a.s. Prague 4. a. a. Stamford. Kingswood. Vyskočilova 1422/1a. a. Vyskočilova 1422/1a.s.s. 201 High Ridge RD. Fairfield Connecticut 06431. USA GE Corporate Computer Service Limited Europe Station Road. Vyskočilova 1422/1a. Vyskočilova 1422/1a. Prague 4. Vyskočilova 1422/1a. a. 140 28 Contract on the provision of IT Services SB0002375 Service arrangement contract SB0002487 Contract on treasury services SB0002488 Use of GE networks SB0002490 GE Money Bank. USA Global Consumer Finance Summer Street 1600. Stamford. Vyskočilova 1422/1a. Prague 4. Prague 4. 140 28 GE Money Bank.s. Prague 4. USA Mandate contract SB0002602. Stamford.s. Prague 4. 140 28 GE Money Bank. 140 28 GE Money Bank. USA GE Capital Global Financial Restructuring 201 High Ridge Road. a. 140 28 Implementation Flexcube WORKFLOW management SW SB0000695 Revolving Credit Agreement SB0002484 Global contracts between GE and Chubb Insurance Company (Insurance for people travelling abroad) SB0002522 Global contracts between GE and Actimize Anti-Money Laundering System. 140 28 GE Money Multiservis. 140 28 GE Money Bank. 140 28 GE Money Bank.s. 140 28 GE Money Multiservis. Vyskočilova 1422/1a. a. 140 28 General Electric Company 3135 Easton Turnpike. USA GE Capital Registry. Stamford. a. a. Prague 4. a.s. 811 09.s.42 GE Money Bank Consolidated Annual Report 2010 Report on Relations between Related Parties 43 Contracts with other companies within the GE group GE Money Bank.s.V. Vyskočilova 1422/1a. a. A-1220 Vienna. Stamford. Austria GE Capital Corporation. a. a. Vyskočilova 1422/1a.s. 140 28 GE Money Bank. Connecticut. 140 28 GE Money Bank. SB0002376 Contract on the provision Information technology SB0002480 Master Servives Agreement SB0001887 MSA (Operational / Consulting Support Services) SB0004313. a. Prague 4.s. Wilmington United States GE Money. a.s. Vyskočilova 1422/1a. Bottova 7. Andherl (East). Vyskočilova 1422/1a. Vyskočilova 1422/1a.s. a. 140 28 GE Money Multiservis. 140 28 GE Money Bank. Donaucity Strasse 6/8th Floor. Utrecht. a. a. Stamford. 140 28 GE Money Bank. USA and INDUS Software Private Limited 8 Chinar Heights.s. a. Prague 4.s.s. 140 28 GE Money Bank. 140 28 GE Money Bank.s. a. 811 09. 10811. 140 28 GE Money Bank. 140 28 GE Money Bank. Vyskočilova 1422/1a. CT06828 a Chubb Insurance Company of Europe S. Prague 4. Finance and GE International Incorporated.s. Prague 4. Vyskočilova 1422/1a. a. 3135 Easton Turnpike. Praha 4. 10811.s. a.s. General Electric Capital Corporation. 811 09. 140 28 GE Money Bank. USA General Eletric Company. USA and i-flex solutions. Prague 4.s. a. a. Vyskočilova 1422/1a. Vyskočilova 1422/1a. a. 140 28 GE Money Multiservis. Vyskočilova 1422/1a. a. Prague 4. Slovakia GE Money Czech Holding Company Orange Street 1209. Bottova 7.s. Stamford. a. 140 28 GE Money Bank. Bristol. Prague 4. Stamford. Vyskočilova 1422/1a.s. India GE Capital International Holdings Corp. Prague 4. 140 28 GE Money Bank. 140 28 GE Money Brokers. 260 Long Ridge Road. 140 28 GE Money Bank. Summer Street 1600. Stamford. a. Netherlands GE Consumer Finance. Vyskočilova 1422/1a. Vyskočilova 1422/1a. Inc. Prague 4. Mumbai 400096. India General Electric Service. Dublin. India General Electric Capital Corporation Summer Street 1600.s. Vyskočilova 1422/1a. 140 28 GE Money Bank. Vyskočilova 1422/1a. Prague 4. a. B. Vyskočilova 1422/1a.A.s. Prague 4. Stamford. Prague 4. Prague 4.. Prague 4. USA and Telindus. Prague 4. Stamford. Prague 4. Vyskočilova 1422/1a. Prague 4. 201 High Ridge RD. Vyskočilova 1422/1a.. Prague 4. 140 28 GE Money Bank. a.s.s. Vyskočilova 1422/1a. Fairfield Connecticut. 140 28 GE Money Multiservis. Vyskočilova 1422/1a. England Global Consumer Finance Summer Street 1600. Vyskočilova 1422/1a. Vyskočilova 1422/1a. 260 Long Ridge Road.s. Vyskočilova 1422/1a. Mumbai 400096.s. a.

s. Prague 4. Prague 4. 140 28 GE Money Bank.r. Vyskočilova 1422/1a. Prague 4. 2001 OPS Services Co-operation agreement (as of 28. a. a. Prague 4. s. 140 28 GE Money Brokers.o.s. 140 28 GE Capital (Czech) Holdings.s. Prague 4.o. 2008 SM0000288 Contract on the provision Information Technology as of 2.. Prague 4. Prague 4. Vyskočilova 1422/1a. 1. who have only a credit card Contract of custody and technical Certificates as of 15. 2011 GE Money Bank.s. Bottova 7. 140 28 GE Money Brokers. a. Karla IV. 05.r.r. Prague 4 . 2006) . 2008 SM0000288 Contract on the provision Information Technology as of 2. Prague 4. 140 28 GE Money Bank. a. 140 28 GE Money Bank. Bottova 7. 2007 for an indefinite period Lease contract – AXIS Ostrava valid from 01. 140 28 GE Money Auto. s. Vyskočilova 1422/1a. 2007) Internetbank for clients GEMM. 140 28 GE Money Multiservis.g.s. Vyskočilova 1422/1a. a.o. 140 28 GE Money Bank. Prague 4. Vyskočilova 1422/1a.o.s.s. Prague 4. a.r. 1. 140 28 GE Money Bank. a. Prague 4.r. Prague 4. The Bank reinvoices the costs associated with the lease at the BB Centre building proportionally to these companies on a monthly basis.s. Vyskočilova 1422/1a. Prague 4.r. Prague 4. valid from 01. 2008 SM0000288 Contract on the provision Information Technology as of 2. Prague 4. a.s. Vyskočilova 1422/1a.s. Vyskočilova 1422/1a. Opletalova 2 SA0000228 Lease contract – Hradec Králové. Lidická 31 SA0000232 Lease contract – Jaroměř. a. 140 28 GE Money Bank.s. Vyskočilova 1422/1a. a. s. Vyskočilova 1422/1a. a. a. Prague 4.r. 01. Prague 4. Vyskočilova 1422/1a. 140 28 GE Money Bank. 140 28 Lease contract – in the BB Centre building. 140 28 GE Money Multiservis. Prague 4. 140 28 GE Money Bank. s. 140 28 Inkasní a exekuční servis s.s. Vyskočilova 1422/1a.r. Vyskočilova 1422/1a. 2001 OPS Services Mandate contract as of 10. Vyskočilova 1422/1a.s.s. Prague 4 Lease contract – Olomouc. Prague 4. Vyskočilova 1422/1a.s. Prague 4. a. 140 28 GE Money Auto.lease of telephone exchange /services (direct/indirect costs) for training purposes in Ostrava Mandate contract as of 10. which uses part of the Bank’s premises located in regional cities for the sale of its products.r. 140 28 GE Money Bank.s. a. Vyskočilova 1422/1a. 140 28 GE Money Bank. a. 140 28 GE Money Bank. Vyskočilova 1422/1a.o. Bratislava. Prague 4. Vyskočilova 1422/1a. a. Prague 4. 140 28 Inkasní a exekuční servis s.s. Prague 4.s. SR GE Money Multiservis. 140 28 GE Money Auto. Prague 4. Prague 4.for credit cards/loans/ OK cards .s. Vyskočilova 1422/1a. 2007 Performance from 01. Vyskočilova 1422/1a. 140 28 Inkasní a exekuční servis s. Bottova 7. a. a. Vyskočilova 1422/1a. keeping of current accounts and overdraft accounts. GE Money Bank. Bratislava. Bottova 7. 05. s. Vyskočilova 1422/1a. Vyskočilova 1422/1a.s. 2008 SM0000288 Contract on the provision Information Technology as of 2. 140 28 GE Money Bank. 140 28 GE Money Bank. Prague 4. 140 28 GE Money Multiservis.s. a. 140 28 GE Money Bank. 2007 Mandate contract as of 10. Prague 4. Prague 4. Prague 4. Prague 4. Vyskočilova 1422/1a. 140 28 GE Money Bank. s.s. s.r. Prague 4.o. Prague 4 SM0000454 Lease contract – in the BB Centre building. 140 28 GE Money Auto. 140 28 GE Money Multiservis. Prague 4. The Bank has also concluded a contract with Global Consumer Finance Ltd on the provision of services in the area of IT project management (Information technology). Bottova 7.s. 2008 SM0000288 GE Money Bank. Vyskočilova 1422/1a. s. 140 28 GE Money Auto. 2006) .o. a. a.s. Prague 4. Prague 4. 2007 or an definite period to 31. 2000 OPS Services Mandate contract as of 10. Vyskočilova 1422/1a. Vyskočilova 1422/1a.s. Prague 4. a.o. Vyskočilova 1422/1a. 811 09.s. Prague 4. 140 28 GE Money Auto.r. SR . Vyskočilova 1422/1a. a. Bratislava 811 09. a. s. 140 28 GE Money Bank. Vyskočilova 1422/1a.s.s. a. 140 28 GE Money Bank.s.s. Vyskočilova 1422/1a. a.r. Prague 4. As consideration it pays the Bank arms-length rent including proportional associated costs for the operation of the commercial locations. Vyskočilova 1422/1a.r. 140 28 GE Money Bank. 140 28 GE Money Multiservis.o. 140 28 GE Money Bank.s.Chodov SM0000455 Lease contract – in The Park building no.cash withdrawals Co-operation agreement (as of 01. Jírovcova 1863/1 SA0000231 Lease contract – in The Park building no.s. 140 28 GE Capital (Czech) Holdings. 1.s.s. Prague 4. Vyskočilova 1422/1a. 140 28 GE Money Bank. a. Vyskočilova 1422/1a.s. 01. 140 28 GE Money Bank. a. 140 28 GE Money Multiservis. Vyskočilova 1422/1a. Vyskočilova 1422/1a. Prague 4. Vyskočilova 1422/1a. 140 28 GE Money Bank. Vyskočilova 1422/1a. 811 09. 140 28 GE Money Auto. Mandate contracts and other receivables ensuing from contracts The Bank also provided services in the non-retail area to GE companies in the Czech Republic and the Slovak Republic. 140 28 GE Money Auto. a. 01. a. s. Prague 4. Vyskočilova 1422/1a. 140 28 GE Money. Vyskočilova 1422/1a. Vyskočilova 1422/1a. Vyskočilova 1422/1a. 01. a. Vyskočilova 1422/1a. 140 28 GE Medical Systems Czech Republic. SR GE Money. Vyskočilova 1422/1a. a.s. 07. 1999 OPS Services Mandate contract as of 01. a. 140 28 GE Money Multiservis. 1. a. 140 28 Co-operation agreement (as of 01. Prague 4. Prague 4. a. Prague 4. Prague 4. s.o.s. Vyskočilova 1422/1a. Vyskočilova 1422/1a. Vyskočilova 1422/1a. a. 03. Prague 4 .s. 2008 SM0000288 Contract on the provision Information Technology as of 2. a. Vyskočilova 1422/1a.s. a. These services were rendered at arms-length business conditions. s.o.o. 1999 – credit card transactions fee Contract on the provision Information Technology as of 2. Prague 4. 140 28 GE Money Bank. 01. SR GE Money Multiservis. Vyskočilova 1422/1a. Prague 4 Lease contract – in the BB Centre building.s. The Bank concluded lease contracts with GE Money Auto. 2294/2. Bratislava 811 09. 1. Vyskočilova 1422/1a.o.o. 140 28 GE Money Bank. Vyskočilova 1422/1a.s. Vyskočilova 1422/1a.o.Chodov SA0000227 Lease contract – in the in the BB Centre building. 11. 01. s.s. Prague 4. e. a. 11. Prague 4. The Bank also provides traditional banking services to its affiliated companies at arms-length conditions. Ve Sladovnách 37 SA0000229 Lease contract – České Budějovice. Prague 4. 140 28 GE Money Bank. 811 09. 05. Prague 4. a. Vyskočilova 1422/1a. which have their headquarters in the BB Centre building in Vyskočilova Street. 140 28 GE Money Bank. 1. 502 SA0000230 Lease contract – Brno. Prague 4 SA0000048 Lease contract – in the BB Centre building. a. Vyskočilova 1422/1a. SR GE Money.2294/2. 12. a. Prague 4.44 GE Money Bank Consolidated Annual Report 2010 Report on Relations between Related Parties 45 Lease contracts – receivables The Bank concluded lease contracts with companies in the GE group. 2006) ..r. Vyskočilova 1422/1a.r.o. Prague 4. Prague 4.r. a.s. Vyskočilova 1422/1a. Vyskočilova 1422/1a.management of credit cards (cash withdrawals) Co-operation agreement (as of 01. Prague 4. 140 28 GE Money Auto. Bratislava.

Vyskočilova 1422/1a. Hungary GE Money Multiservis.s. EVALUATION The Bank declares that it has not incurred any loss as a result of the conclusion of the above-mentioned contracts. 6. related to the Credit Card and Consumer Credit business were transferred to GE Money. a.s.). a. Prague 4. Vyskočilova 1422/1a. a. 2011 .s. Prague 4. Contracts concluded between Multiservis and GE Money Bank.r. or the performance rendered or counterperformance accepted..o. a.r. a.s. 140 28 Contract on the Cooperation .s.r. 4. 2008 SM0000126 Loan Budapest bank Loan Facility Contract on the provision as of 30. 140 28 GE Money Bank. Praha 4. 3. Vyskočilova 1422/1a.46 GE Money Bank Consolidated Annual Report 2010 Report on Relations between Related Parties 47 Mandate contracts and other receivables ensuing from contracts (continued) GE Money Bank. 6. (and thus ceased to exit). Card. Prague. s. March 31. OTHER MEASURES.r.o. were transferred to GE Money Auto.o.). a.o. Praha 4. s. the contracts concluded between Multiservis and GE Money Auto.s. Vyskočilova 1422/1a.r. 140 28 GE Money Auto. s. Loan Internet Bank – as of 7.s. performance and counter-performance of the Controlled Party in relation to the Controlling Party as a shareholder of the Controlled Party. were trasnferred to GE Money. s. 140 28 GE Money Multiservis.Credit Card. Praha 4. 140 28 GE Money Bank. 3. Budapest.o. 140 28 Budapest Hitel és Fejlesztési Bank Nyrt. (which subsequently merged with GE Money Bank. the aim of which was the support to the car financing business. Prague 4. 2009 – application use GE Money e-servicing GE Money Bank. performance or counter-performance were adopted or made in the interest or at the urging of the Controlling Party and controlled parties on the part of the Controlled Party over and above of the framework of normal measures. O. (formerly GE Money Auto. Vyskočilova 1422/1a.r. that occurred during the course of the accounting period. 2009 – application use GE Money e-servicing Contract on the provision as of 30. and GE Money Auto. 1138 Váci út 188. a.s. a. which subsequently merged with GE Money Bank. s. Vyskočilova 1422/1a.s. PERFORMANCE RENDERED AND COUNTER-PERFORMANCE ACCEPTED During the course of the accounting period no other measures. a.K. The other contracts concluded between GE Money Multiservis. on the basis of which other supplementary and supporting services were provided. Vyskočilova 1422/1a.s. During the course of the accounting period no legal acts. s. were made in favor of the Controlling Party and the controlled parties over and above the framework of the normal legal acts by the Controlling Party as part of the performance of its rights as a shareholder of the Controlled Party. the performance of the other legal acts and other measures mentioned above.s. other than the ones mentioned above. a.o. a. Prague 4. 140 28 (b) List of other legal acts In connection with the changes in legal structure of the GE companies in the Czech Republic.

s.. a. Paris and Stamford that they provide to the departments at headquarters and to the 1.o. s. and few contracts about the current accounts held at GE Money Bank. and the contract on using logo and trademarks of GE.. mainly to retail and medium-sized clients. a. a multinational GE corporation. 100% AgroConsult Bohemia s. Besides the above. Contracts with parent company – liabilities 100 % GE Money Auto. a. s.r. a. GE Money Brokers. Vyskočilova 1422/1a. Vyskočilova 1422/1a.s Vyskočilova 1422/1a. a. Inc. 100 % 100 % GE Money Auto.r. 140 00 Prague 4 GE Money Bank. Vyskočilova 1422/1a . 513/1991 Coll. 140 00 Prague 4 GE Money Bank. a.r. 140 00 Prague 4 100 % GE Capital International Holdings Corporation Global Consumer Finance 100 % 100 % 100 % 100 % GE Money Bank.s.r.r. s. 140 00 Prague 4 GE Money Auto. 07. related to the use of the application of GE Money e-servicing. and Inkasní a exekuční servis.s.r.s.s.servicing (UFO – universal frontend) Contract on the provision of IT services Mandate contract as of 01. Praha 4.r. Vyskočilova 1422/1a. were the contracts on providing accounting services. Vyskočilova 1422/1a. a.o. there are the liabilities from the sub-rental contracts of the branches of GE Money Bank.. a.o. s. GE Capital (Czech) Holdings. Vyskočilova 1422/1a. LIST OF OTHER CONTRACTS AND LEGAL ACTS (a) List of contracts Contracts for consideration – liabilities Auto concluded the contracts listed below with companies in the GE group. contract with GE Money Bank. s. 140 00 Prague 4 GE Money Auto. a. a. as amended. These are namely mandate contracts GE Money Multiservis. ČR (hereinafter referred to as the “Controlling Party“) as the Controlling Party and the company GE Money Auto. (hereinafter referred to as the “Controlled Party“ This report was compiled in order to meet the information duty under paragraph 9 of Section 66a of Act No. (SR) GE Money Auto.o. s. a. Praha 4. a. 140 28 Prague 4 GE Money Bank.r. Auto has concluded the contracts on the support of GE in Dublin. a.o. 513/1991 Coll.o.48 GE Money Bank Consolidated Annual Report 2010 Report on relations between related parties 49 GE Money Auto. 100 % General Electric Capital Corporation 100 % GE Money Auto. 2.r. s. 140 28 Prague 4 Contract on a bank overdraft loan Contract on providing services regarding application GE Money e.o.s.. a report was compiled on relations between the company GE Money Bank.s. 2000 OPS Services Mandatory contract General Electric Capital Services. INTERCONNECTION OF PARTIES General Electric Company Auto management. a. In accordance with paragraph 9 of Section 66a of Act No. as amended.s. Vyskočilova 1422/1a . s. 140 28 Prague 4 GE Money Bank. . or “Auto“) as the Controlled Party and between the Controlled Party and other parties controlled by the Controlling Party for the accounting period from 1 January 2010 – 31 December 2010. Another type of contracts resulting in obligations of GE Money Auto.s. is part of the GE Money.r.s. Vyskočilova 1422/1a.s. which focuses on providing financial services.. Vyskočilova 1422/1a. (SR) 100 % Inkasní a exekuční servis s. GE Money Multiservis. a. a.o. Vyskočilova 1422/1a. s. services of the Operation dept. and SATELIT with GE Money Multiservis.r.s. which use each other’s distribution networks to provide their products at arms-length business conditions.o. under which liabilities ensue to it.s.. a.r.s. s.o. 140 00 Prague 4 GE Money Bank. Vyskočilova 1422/1a .o. 140 00 Prague 4 GE Money Auto. contracts of the rental of tangible assets related to GE Money Multiservis. Furthermore. the Commercial Code.s. a.r. the Commercial Code.s.o. Auto co-operates most closely with its affiliated companies within the GE group of companies. on the basis of which the company invoiced a proportional part of the costs to the GE Money Bank. GE Money. s.s.o.

s. Vyskočilova 1422/1a.r. 140 28 Prague 4 GE Money Bank. s.s.s. 140 00 Prague 4 GE Money Multiservis. s.r.r. a.o. 140 28 Prague 4 GE Money Bank.o. a.r.s.o. a. Vyskočilova 1422/1a. s.r. 140 28 Prague 4 GE Money Multiservis. 140 00 Prague 4 Contract on the provision of services – operation a supervision nad IBS90 a SWIFT Contract on the provision of IT services in connection – AS 400 Contract on the provision of Information Technology Contracts with other companies within the GE group – receivables GE Money Auto.o.o. 140 00 Prague 4 GE Money Auto. s.s. Inc. 140 00 Prague 4 Contracts with parent company – receivables Contract on the provision of advisory service (MSA) Use of trademarks E-mail services Global contract between GE and Chub Insurance Company – insurance of persons travelling abroad Global contract between GE and GENPACT Services MSA – providing system Global AD Agreement on the sales support (IF interests) Mandatory contract (services OPS and SATELIT) Mandatory contract GE Money Auto. 140 00 Prague 4 GE Money Bank. Vyskočilova 1422/1a.r. Vyskočilova 1422/1a. Vyskočilova 1422/1a. a. Vyskočilova 1422/1a. s.r. Vyskočilova 1422/1a. Vyskočilova 1422/1a. Vyskočilova 1422/1a . 140 00 Prague 4 GE Money Auto. 140 00 Prague 4 GE Money Auto. Vyskočilova 1422/1a. s. s.r.o.o.r. 140 28 Prague 4 GE Money Multiservis. GE Consumer Finance Summer Street 1600. also sub-leases contracts of office space where is its headquarters in the BB Centre building in Vyskocilova street. 140 00 Prague 4 GE Money Auto. s.r. Vyskočilova 1422/1a. 140 00 Prague 4 GE Money Auto.r. 140 00 Prague 4 GE Money Auto. 140 28 Prague 4 GE Capital (Czech) Holdings. 140 28 Prague 4 GE Money Bank. Vyskočilova 1422/1a. 140 00 Prague 4 GE Money Auto. a. a. Vyskočilova 1422/1a . 140 00 Prague 4 GE Money Auto. s.r.r. 140 00 Prague 4 GE Money Auto.s.r. U. a.o.o.r. 140 00 Prague 4 GE Money Auto. s. s. 140 00 Prague 4 GE Money Auto.r. s. a.o. Croxley Business Prak.s. General Electric Company General Electric a Chub Insurance Company of Europe S.r. Lidická 31 Lease contract – Jaroměř. a.o. Vyskočilova 1422/1a. Opletalova 2 Lease Contract – Hradec Králové.o. Watford Hertfordshire WD 18 8Y. Vyskočilova 1422/1a . 140 00 Prague 4 GE Money Auto.r.o. a. UK Contract on the provision of IT services – in connection with AS 400 (continued) . 502 Lease Contract – Brno. 140 00 Prague 4 GE Money Auto. Bottova 7. s. 31-36 Golden Lane. Stamford.o. s. Vyskočilova 1422/1a.s. 140 28 Prague 4 GE Money Bank. s. Vyskočilova 1422/1a.o. Vyskočilova 1422/1a. 140 28 Prague 4 Contract on the provision of accounting and controlling services Contract on renting a property – DELL LATITUDE D600 JG9181J Contract on renting a property – DELL LATITUDE D610 HQZMM1J Contract on providing Master Services Agreement Lease contracts – liabilities GE Money Auto. s.o.o. 140 00 Prague 4 GE Money Auto. Vyskočilova 1422/1a.S.A GE capital Corporation. 140 00 Prague 4 GE Capital Woodchester Ltd. s.r. a.s. s. a.o. GE Consumer Finance Summer Street 1600. Vyskočilova 1422/1a. Vyskočilova 1422/1a . 140 00 Prague 4 GE Money Auto. Stamford. Malvern House.r. IT services – in connection with AS 400 Ireland Dublin 8.o.s. a.r. Vyskočilova 1422/1a. 140 28 Prague 4 GE Money Multiservis. a. a. Karla IV. Vyskočilova 1422/1a .s.r. Vyskočilova 1422/1a.o. a. Vyskočilova 1422/1a.o. 140 28 Prague 4 GE Money Bank.s.r.r. 140 00 Prague 4 GE Money Auto.o.r. 140 28 Prague 4 GE Money. 140 28 Prague 4 GE Money Bank. s.. 140 00 Prague 4 GE Money Auto. Vyskočilova 1422/1a. Andre Prothin 92063 Paris. Vyskočilova 1422/1a. s. Vyskočilova 1422/1a. Vyskočilova 1422/1a. 140 00 Prague 4 Contract on the provision of IT services Contract on the provision of IT services Contract on the provision of IT services (MSA) GE Money Auto. 140 28 Prague 4 GE Money Brokers.o. Vyskočilova 1422/1a. a.o.o. Vyskočilova 1422/1a. a. s. 140 28 Prague 4 GE Money Multiservis. Vyskočilova 1422/1a .r.r.. Vyskočilova 1422/1a Lease Contract – Olomouc.A GE Capital Registry.o. 140 28 Prague 4 GE Money Multiservis. s. Vyskočilova 1422/1a. a. 811 09 Bratislava GE capital Corporation.A General Electric Capital Corporation a GENPACT INTERNATIONAL Swiss Branch Zug.s. Vyskočilova 1422/1a. Vyskočilova 1422/1a. 140 28 Prague 4 GE Money Multiservis. GE Money Auto.r. GE Money Servicing Limited. LaDefense 4. 140 28 Prague 4 GE Money Bank. s. Vyskočilova 1422/1a. s.o. GE Money Auto. Vyskočilova 1422/1a. Vyskočilova 1422/1a.S. a.s. La Defense Cedex. Vyskočilova 1422/1a. Vyskočilova 1422/1a . Bottova 7. Bottova 7. Vyskočilova 1422/1a. s.r.o. 140 00 Prague 4 GE Money Auto.r. Vyskočilova 1422/1a . Vyskočilova 1422/1a. Contract on the provision of Trading as GE Money Ireland. 140 28 Prague 4 Inkasní a exekuční servis s. 140 00 Prague 4 GE Money Auto. s. Vyskočilova 1422/1a.r. Vyskočilova 1422/1a. a. a. 140 00 Prague 4 GE Money Auto.r.r. 140 28 Prague 4 GE Money Bank. a. Vyskočilova 1422/1a.o. Luxembourg GE Money Multiservis. 140 00 Prague 4 GE Money Auto. 140 28 Prague 4 Lease contract – in the BB Centre building. 140 00 Prague 4 GE Money Auto. Vyskočilova 1422/1a . UK. Vyskočilova 1422/1a. U.s. s.o.s. 140 00 Prague 4 GE Money Bank.s. FR GE Money Multiservis. 140 00 Prague4 GE Money Auto. s.o. 140 00 Prague 4 GE Money Auto.o. s.r. s. Vyskočilova 1422/1a. a.o.50 GE Money Bank Consolidated Annual Report 2010 Report on Relations between Related Parties 51 Contracts with other companies within the GE group – liabilities GE Money Auto. s.s.o.o. 811 09 Bratislava Inkasní a exekuční servis s. Jírovcova 1863/1 Lease contract – in the bulding – The Park 2294/2. Vyskočilova 1422/1a. s.s.r. Vyskočilova 1422/1a. Vyskočilova 1422/1a.r. Vyskočilova 1422/1a. 140 00 Prague 4 GE Money Auto. 140 00 Prague 4 GE Money Auto.o.r. s.o.s. a. 20 Av.o. 140 28 Prague 4 GE Money Multiservis.r.s. Vyskočilova 1422/1a.r. 811 09 Bratislava Co-operation agreement – marketing services Contract on cost share Construct Contract on cost share of credit card purchasing Contract on cost share Defend Lock Contract on the provision of Information Technology Contract on the provision of Information Technology Contract on the provision of Information Technology Contract on the provision of Information Technology Contract on the provision of Information Technology Auto concluded lease contracts with company GE Money Bank. Vyskočilova 1422/1a. 140 00 Prague 4 GE Money Auto. Tour Europlaza. s. Prague 4 – Chodov GE Money Auto.s. Vyskočilova 1422/1a.s.o. As consideration it pays the Bank arms-length rent including proportional associated costs for the operation of the commercial locations. 140 00 Prague 4 GE Money Multiservis.o. Vyskočilova 1422/1a. 140 28 Prague 4 GE Money. s. s.r. Vyskočilova 1422/1a. Vyskočilova 1422/1a. s.s. 140 00 Prague 4 GE Money Auto.s. Ve Sladovnách 37 Lease contract – České Budějovice.s. which uses part of the Bank’s premises located in regional cities for the sale of its products. 140 28 Prague 4 Global Consumer Finance International Holdings SAS. Vyskočilova 1422/1a. 140 00 Prague 4 GE Money Auto.

o. 2 Off Bruntcliffe Way. March 31. and counter-performance of the Controlled Party in relation to the Controlling Party. or counter-performance were adopted or made in the interest. other than the ones mentioned above. s.s. as part of the performance of its rights as a shareholder of the Controlled Party. 2011 The leading entity: Name of the Bank: GE Money Bank.r. 140 00 Prague 4 GE Money Auto. EVALUATION GE Money Auto. performance. (formerly GE Money Auto. 3. s. CT 06927 USA GE CAPITAL GLOBAL CONSUMER FINANCE. of the Controlling Party.o. s. UK Service Agreement. s. 140 00 Prague 4 GE Money EMEA 3rd Floor Le Pole House Great Ship Street. a. s. OTHER MEASURES. PERFORMANCE RENDERED AND COUNTER-PERFORMANCE ACCEPTED During the course of the accounting period no other measures. performance. Vyskočilova 1422/1a. and controlled parties on the part of the Controlled Party. Morley. as a shareholder of the Controlled Party. During the course of the accounting period.r.o. s.o. the performance of the other legal acts and other measures mentioned above. a. or the performance rendered or counter-performance accepted. were transferred to GE Money Auto. no legal acts. were made in favor of the Controlling Party and the controlled parties over and above the framework of normal legal acts by the Controlling Party.o. Vyskočilova 1422/1a. 140 00 Prague 4 GE Money Auto. the contracts concluded between Multiservis and GE Money Auto. over and above the framework of normal measures. declares that it has not incurred any loss as a result of the conclusion of the above-mentioned contracts. Prague 4 Identification no: 25672720 Business: Bank Date of preparation: 20 April 2011 Code of the Bank: 0600 . Vyskočilova 1422/1a.52 GE Money Bank Consolidated Annual Report 2010 Consolidated Auditor’s Report and Financial Statements 53 Contracts with other companies within the GE group – receivables (continued) GE Money Auto.r.) (and thus ceased to exist) related to the AutoCredit business.CEE services Contract on the provision of IT services – in connection with AS 400 Contract on the provision of IT services – in connection with AS 400 (b) List of other legal acts In connection with changes in legal structure of GE companies in the Czech Republic.r. or at the urging. that occurred during the course of the accounting period. Leeds. Dublin 8 Ireland GE CAPITAL CORPORATION GLOBAL CONSUMER FINANCE 1600 Summer Street Stamford. Regestered office: Vyskočilova 1422/1a. Capital House. CONSOLIDATED AUDITOR’S REPORT AND FINANCIAL STATEMENTS 4. s.o.r. Prague.r.

458 17.975 140.079.000 4.092.349 16 17 18 19 20 47. .056.101 17.979 102.000 3. 2010 672.819 3.962 The notes set out on pages 59 to 86 form part of these consolidated financial statements.635 64.325 153.519.575 844.053 27.317.129. 2010 3.861 17.988.550.615.652 1.282 1.623 510.163.673.332 2.026 718.722 1. 1.000 4.177.701.000 50.719 198.056.804 0 0 30.466. 12.701.929 147.490 15.894.861 50.597 240 6.770 108.831 25.917 0 0 844.917 510.129.668.212.54 GE Money Bank Consolidated Annual Report 2010 Consolidated Auditor’s Report and Financial Statements 55 CONSOLIDATED BALANCE SHEET – ASSETS as at 31 December 2010 CONSOLIDATED BALANCE SHEET – LIABILITIES as at 31 December 2010 CZK 000 1 2 Cash in hand and balances with central banks State zero coupon bonds and other securities eligible for refinancing with the CNB of which: a) securities issued by the government institutions 3 Receivables from banks and cooperative savings associations of which: a) repayable on demand b) other receivables 4 Receivables from customers .079.437 98.757.910 14 103.415 15.799.534 106.850 0 0 0 43. 2010 296.000 102. 12.000 510.626.023.484.578) 140.129.171. mutual fund certificates and other investments Participation interests with substantial influence Participation interests with controlling influence Intangible fixed assets Tangible fixed assets of which: land and buildings for operating activities 11 13 Other assets Prepaid expenses and accrued income Total assets note 31.319.131 (262.962 14 15 16 17 18 13 9 10 8 4 5 6 2 b) other payables Due to customers – cooperative savings association's members of which: a) repayable on demand b) other payables Other liabilities Deferred income and accrued expenses Provisions of which: a) provision for pensions and similar obligations b) provision for taxes c) other Registered capital of which: a) registered paid up capital Share premium Reserve funds and other funds from profit of which: a) statutory reserve funds and risk funds Gains (losses) from revalution of which: a) assets and liabilities Retained earnings from previous years Profit for the accounting period Impact of acquisition of minority shares Minority registered capital Minority share premium Minority reserve funds and other funds from profit including retained earnings from previous years 20 21 Minority profit for the accounting period Impact of deconsolidation on minority interest Total liabilities 27 27 28 27 25 24 23 110.580 15 751. 19 0 876.142.634 540.898.575 1.092.979 102.517 63.896 CZK 000 1 Due to banks and cooperative savings associations of which: a) repayable on demand note 22 31.367.023.679 473.015 240 12.381) 0 0 13 15.309 94.667 12.cooperative savings association's members of which: a) repayable on demand b) other receivables 5 Debt securities of which: a) issued by government institutions b) issued by other entities 6 7 8 9 10 Shares.302 0 244.310 2.459 8.404 131.796 115.000 63.816 21 3. 2010 3.349 0 751.578 (876.466.097 195.858 371. 1.808 1.459 The notes set out on pages 59 to 86 form part of these consolidated financial statements.000 102.517 17.458 12.842 15 11.870 20 106.732.044.141 82.377.000 510.804 3.607 27 103.235 2.380 384.342 0 0 147.667 11.592 128.367.

900.566 68.076 (5.618 (858.231 140.559 18.924 13.709 3.315 138.578 The notes set out on pages 59 to 86 form part of these consolidated financial statements.998.1.339.457) 5.330 123.865) (557. 2010 1.210) The notes set out on pages 59 to 86 form part of these consolidated financial statements.002. 12.596 (1. administration and deposit 30 67.088.312 30.643 18. creation and use of reserves and adjustments to tangible and intangible FA Release of adjustments and provisions for receivables and guarantees.760 30.212.162.261. creation and use of adjustments and provisions for receivables and guarantees Release of adjustments to participation interests with controlling and substantial influence Creation and use of other provisions Current year profit (loss) from ordinary activities before tax Income tax Net profit for the accounting period Bank shareholders profit Minority profit 29 26 14.832) (2.531 Off-balance sheet assets 1 3 4 6 Commitments and guarantees granted Receivables from spot transactions Receivables from fixed term transactions Receivables written-off 30 30 13.550 14.909) 4.758.131 876.105 55.249.160 14.764) (5.014 14.56 GE Money Bank Consolidated Annual Report 2010 Consolidated Auditor’s Report and Financial Statements 57 OFF-BALANCE SHEET ITEMS CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2010 CZK 000 note 31.223 5.585.343 4.678.681 4 5 6 7 8 9 Commission and fee income Commission and fee expense Gain or loss from financial operations Other operating income Other operating expenses Administrative expenses of which: a) employee expenses of which: aa) social and health insurance 6 6 7 8 8 9 4.211 614 0 6.477 190.757.508.496.947.172.109.236 (678. 26 14.359.559 2 3 Interest expense and similar expense Income from shares and participation interests: of which: a) income from participation interests with substantial influence b) income from participation interests with controlling influence c) income from other shares and participation interests 4 5 (1.204.685 8.832 61.150) 75.181.344 1. income from written-off receivables 13 14 17 19 23 24 25 26 Write-offs.375) (2.937. 26 2.918.175) 7.597 Off-balance sheet liabilities 9 10 11 12 14 Commitments and guarantees received Collaterals and pledges received Payables from spot transactions Payables from fixed term transactions 30 Values taken into custody.2010 CZK 000 1 Interest income and similar income of which: interest income from debt securities note 4 2010 11. 11 12 b) other administrative expenses Depreciation.923 365.763. .967) (1.

050 510.828 (loss) of acquisition of minority shares Balance as at 1.579.088.000 4. 1.131 876.000 4.58 GE Money Bank Consolidated Annual Report 2010 Notes to the Consolidated Financial Statements 59 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2010 CZK 000 Registered capital Share Reserve Revaluation premium funds gains (losses) Profit Impact Total equity Minority interests Total equity incl.517 20.701.000 63.861 17.381) 25.656 0 12.804 0 22.355.381) (262. 12.131 0 3.979 102.701.979 102.732.479.212.355. 2010 510.050 The notes set out on pages 59 to 86 form part of these consolidated financial statements. Year ended: 31 December 2010 .695.184 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 0 0 0 12.578 4.644 11.656 0 0 12.000 50. 2010 FX gains (losses) and gains (losses) not included in the profit and loss account Net profit for the accouning period Changes due to legal restructuring of the Group Impact of acquisition of minority shares Balance as at 31.762) 0 0 0 0 0 (262.381) 25.695.709 0 0 0 0 0 0 0 (12.211.762) (12.935 (262.212. minority interests 34.367.656 0 0 0 0 3.381) 0 0 (262.

501/2002 Coll. (a) Transaction Date Depending on the type of transaction. the Bank purchased selected assets and liabilities from Agrobanka. Vyskočilova 1422/1a 140 28 Praha 4.r. a. which consisted of cash and equity accounts. financial derivatives.r. The balance sheet comparatives show the opening balances as at 1 January 2010.e. SIGNIFICANT ACCOUNTING POLICIES (c) Basis of Preparation The consolidated financial statements have been prepared on the basis of the accounting records maintained in accordance with the Act on Accounting and the relevant regulations and decrees of the Czech Republic. the Regulated Consolidated Entity included GE Money Bank.. s. i. a. form the regulated consolidated entity of GE Money Bank. the date of purchase. a.r. The aim is to use the worldwide experience of GE Money not only to allow uniform communication.s. bank’s notice.3 billion). From this initial capital. as its sole shareholder. strengthen our mutual relationships. The Bank generates a substantial proportion of the Group’s income and represents substantially all of the assets and liabilities of the GEM Group. which was established on 9 June 1998 by a capital contribution from GE Capital International Holdings Corporation in the amount of CZK 2.o. no comparisons are presented in the profit and loss account and related footnote disclosure. formerly GE Capital Bank. were not included in the Regulated Consolidated Entity because their impact for the Group is immaterial. On 22 June 1998. a. • On 7 December 2010 Wade Udell Robison was appointed as a member of the Board of Directors. To view the organizational structure. i. a. the acquired assets and liabilities were recorded in the Bank’s balance sheet at the values determined based upon the purchase agreement.s. Numbers in brackets represent negative amounts. was contributed into GEMA. which regulates the layout and definition of financial statements and disclosure requirements for banks and certain financial institutions.o. bank statement or other documents). (GEMA) changed its legal form from a joint-stock company to a limited company. The consolidated financial statements have been prepared in accordance with Czech Ministry of Finance Decree No. was renamed GE Money Bank. and CBCB .s. the settlement date of the Bank’s payment orders with the ČNB clearing centre.o.000 million.. BASIC INFORMATION (CONTINUED) (b) Definition of the Regulated Consolidated Entity Regulated Consolidated Entity of GE Money Bank. • The GE Money Multiservis. The Group’s Companies Included in Consolidation As at 31 December 2010. as at the decisive date of the merger of the Bank with GE Money.e.. (hereinafter the “Bank” or “GEMB”) together with the subsidiaries set out in point b) of this Note. except for selected financial instruments that are measured at fair value. dated 6 November 2002. Business Firm and Registered Office GE Money Bank. the credit cards and consumer loans business (financing receivables at the net book value of CZK 5. but also to improve processes. The significant accounting policies adopted in the preparation of the financial statements are set out below. were transferred to the Bank from GEMM. the date of order to a correspondent to make a payment. Direct interest in % Minority interest in % 100 100 100 0 0 0 Principal activities Finance leases. The parent company of the Group is the Bank.r. which were deconsolidated as at 31 December 2010. • The second part. a. which comprised the auto loans business (the auto loan portfolio at the net book value of CZK 4.r.o.s. 21/1992 Coll. as a part of a rebranding initiative that was implemented around the world by the ultimate parent company General Electric Company. please see page 18. (GEMM) enterprise was divided into three parts.. loans Administration Agriculture consulting Registered office Prague Prague České Budějovice The Bank’s associates as at 31 December 2010 are as follows: Name of the company Direct interest in % Minority interest in % 20 20 Principal activities Collection of data for credit risk assessment Registered office Prague CBCB – Czech Banking Credit Bureau.. the date of purchasing or selling of foreign currency or securities.o. as amended. the trade date and settlement date of transactions with securities. 5403 Members of the Board of Directors and Supervisory Board of the Bank as the Controlling Company of the Group as at 31 December 2010 Members of the Board of Directors Peter Ronald Herbert (Chairman) Christoph Glaser Brett Matthew Belcher Rajesh Ramakrishna Gupta Jiří Báča Wade Udell Robison Changes in the Board of Directors and Supervisory Board In 2010. • The Bank lost control over the remaining part of GEMM.s. the date of acceptance of values into custody. a..r.s. a. and GE Money Multiservis.r. These financial statements are consolidated financial statements. • GE Money. a. (hereinafter collectively referred to as the “GEM Group” or the “Group”).s.o. The Bank’s subsidiaries as at 31 December 2010 are as follows: Name of the company GE Money Auto. • The first part.o. The entities were consolidated using the full consolidation method. and heighten successful cooperation with clients. AgroConsult Bohemia s. then merged with the Bank on 30 September 2010 (whereas the merger’s decisive date was 1 January 2010) and ceased to exist. a newly acquired subsidiary of the Bank. received media. the Board of Directors changed as follows: • On 6 April 2010 Jiří Báča was appointed as a member of the Board of Directors. s.Czech Banking Credit Bureau.o.9 billion). Inkasní a exekuční servis s.o. the date of payment or collection from a customer's account. a. the date of issue or receipt of a guarantee or opening credit line.60 GE Money Bank Consolidated Annual Report 2010 Notes to the Consolidated Financial Statements 61 1. and GE Money Auto.s. 2.r.. s.s. subsequently transferred the ownership interest in GEMA to the Bank. GE Money entities in the Czech Republic underwent legal restructuring in 2010 as follows: • GE Money Auto.s. (b) and (k) of Banking Act No. • The ownership interests in Inkasní a exekuční servis.s. Therefore. On 17 January 2005 GE Capital Bank. They have been prepared under the historical cost convention on the basis of full accrual accounting. AgroConsult Bohemia s.o. was formed on 3 December 2009.s. Inkasní a exekuční servis s. (d) Comparative Information The legal restructuring in 2010 discussed above results in incomparable information for the current and preceding periods in certain components of the financial statements. a. s. Members of the Supervisory Board Robert Charles Green (Chairman) Aleš Blažek Pavel Zídek Identification Number: 25672720 1.. Michle Czech Republic – registered in the Czech Republic by the Municipal Court in Prague. a. a bank that had previously been put under enforced administration by the Czech National Bank.s. Section B. was contributed into GE Money. foreign currency. Unconsolidated Subsidiary and Associated Undertakings In 2010.r. s.o. as a group of the local controlling bank pursuant to Section 26d (1) (a). . the value date according to a statement received from a Bank’s correspondent (statement means SWIFT statement. the transaction date is defined as the date of payment or collection of cash.s. Entry No.. s. and AgroConsult Bohemia s.r. a. a.r. BASIC INFORMATION (a) Information on the Parent Company GE Money Bank.

Securities received under a resale commitment are recorded in off-balance sheet accounts in “Collaterals and pledges received”. “probable” meaning a probability exceeding 50 percent. The annual depreciable lives for each category of intangible and tangible fixed asset are as follows: Buildings Technical improvement of buildings Furniture Software Cars Inventory Equipment Establishment costs – other intangible fixes assets PCs and servers 40 years 10 years 10 years 5 years 4 years 10 years 5–10 years 5 years 3 years Tangible fixed assets – leasing On the basis of lease contracts Leasehold improvements are depreciated on a straight-line basis over the shorter of the lease terms or their remaining useful lives. Transactions where securities are purchased under a commitment to resell (resale commitment) are treated as collateralized lending transactions. or the present value of the security for debt securities. for both businesses. Adjustments and provisions are reduced in an amount equal to the amount written off on the same account in the profit and loss account. A financial asset or part thereof is derecognized from the balance sheet if the Group loses control over the contractual rights to the financial asset or part thereof. 593/1992 Coll. When the security is sold. • The amount of such performance can be reliably estimated.62 GE Money Bank Consolidated Annual Report 2010 Notes to the Consolidated Financial Statements 63 2. To the extent that a customer repays any portion of the receivable in excess of the discounted value originally assigned to the receivable. Participation interest with substantial influence is one in which the Bank holds at least 20 percent of a subject’s registered capital but not more than 50 percent or one arising from an agreement or from articles of association regardless of the percentage of participation. the condition of securities liquidity is fulfilled. units and other investments are recorded at acquisition cost.cooperative savings association’s members”. If it is not possible to determine whether the market value represents fair value (i. Receivables are written off when the Group has determined the receivable to be permanently irrecoverable. The Group loses this control if it exercises the rights to the benefits defined in the contract. bonds and other debt securities and shares. and tangible fixed assets costing less than CZK 40 thousand with a useful life less than 1 year are charged to the profit and loss account in the period in which they are acquired.e. including share units and other investments. or the available for sale portfolio. Income arising under resale commitments based on the difference between the selling and purchase price is accrued over the period of the transaction and recorded in the profit and loss account as “Interest income and other similar income”. Treasury bills. Receivables from customers purchased from a third party are initially recorded at discounted values from the gross receivables actually due under the contracts with customers. Intangible fixed assets costing less than CZK 60 thousand The Group also accrues interest income from classified receivables. Section 8a “Adjustments to unforfeited receivables due after 31 December 1994” for the non-banking business and. The fair value used to revalue securities is determined based on the market price published as of the date of the fair value measurement. resulting from past events. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (d) Receivables from Banks and Customers Receivables are carried net of adjustments. if the Group proves that securities can be sold for that market price. The write off of unrecoverable receivables is accounted for as “Write-offs. income from written-off receivables”. if such rights expire or the Group waives these rights. The adjusted value of the securities is equal to the share proportion of equity for shares. In the case of securities. the fair value is estimated as an adjusted value of securities. Available for sale securities and shares. Adjustments are created against specific receivables when considered appropriate. Section 8 (“Adjustments to receivables from debtors subject to bankruptcy or composition proceedings”) of the Act on Provisions No. Non-consolidated participation interest with controlling/ substantial influence is valued at acquisition cost net of adjustments owing to the temporary decrease in the value of the participation interest calculated on an individual basis. Premiums and discounts on debt securities are amortized/ accreted through the profit and loss account over the period from the date of purchase to the date of maturity using the effective interest rate method. • It is probable or certain that the event will occur and that it will require a cash outflow representing economic benefits. bonds and other debt securities are recorded at amortized/accreted cost. Interest on debt securities received under a resale commitment is not accrued. Adjustments created by debiting expenses are reported in “Write-offs. the share proportion of a fund’s net assets value for units. are classified into the portfolio that is held to maturity. . Only debt securities can be classified into the portfolio held to maturity. The lending granted under a resale commitment is recorded in “Receivables from banks and cooperative savings associations” or “Receivables from customers . at the same time. Tangible and intangible fixed assets are stated at historical cost and are depreciated using the straight-line method over their estimated useful lives. which have a residual maturity of less than 1 year from the date of purchase. Provisions are established if the following criteria are met: • A duty (legal or factual) to perform exists. (e) Creation of Provisions A provision represents a probable cash outflow of uncertain timing and amount. Adjustments to accrued interest income are established in accordance with the appropriate requirement of the ČNB. this difference is recorded as operating income. For debt and equity securities traded on the public market. (f) Intangible and Tangible Fixed Assets The tax-deductible portion of the period charge for the creation of adjustments for credit losses is calculated in accordance with the requirements of Section 5 (“Banking provisions and adjustments”) for the banking business. The legal title of securities subject to resale or repurchase commitments is transferred to the lender. creation and use of adjustments and provisions to receivables and guarantees”. the respective revaluation difference is charged to the profit and loss account in “Gain or loss from financial operations”. Shares. Shares. Accrued interest income is part of the carrying amount of receivables. 2. if the Group does not prove that it is possible to sell securities for such a market price). Recoveries on loans previously written off are included in the profit and loss account in “Release of adjustments and provisions for receivables and guarantees. creation and use of adjustments and provisions to receivables and guarantees” in the profit and loss account. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (a) Transaction Date (continued) Accounting transactions involving the purchase or sale of financial assets with a usual term of delivery (spot transactions) and fixed term contracts are recorded in off-balance sheet accounts from the trade date until the settlement date. Units and Other Investments Treasury bills. (c) Participation Interest with Controlling/Substantial Influence Participation interest with controlling influence is one in which the Bank holds at least 50 percent of a subject’s registered capital or one arising from an agreement or from articles of association regardless of the percentage of participation. if. fair values are equal to the price reached on the public market of OECD countries. the premium and the discount are amortized/ accreted equally through the profit and loss account over the period from the date of purchase to the date of maturity. based on the Bank’s intention. Receivables are reviewed for recoverability. Accrued interest income is part of the carrying amount of these securities. units and other investments are measured at fair value and gains/losses from this revaluation are charged to equity in “Gains (losses) from revaluation”. The methodology for the creation of adjustments in the appropriate accounting period is included in Note 30. (b) Debt Securities. the portfolio valued at fair value through the profit and loss.

A positive difference on acquired assets is amortized to expenses on a straight line basis over 48 months from the acquisition of the business or part thereof. 9. volatility of financial instruments. A deferred tax asset is recognized only to the extent that there are no doubts that there will be future taxable profits available against which this asset can be utilized.496.816 4.484. • It is expected that the hedge relationship will be highly effective throughout its life. CHANGES IN ACCOUNTING POLICIES The Group did not make any changes in its accounting policies in 2010.683. which is further adjusted by tax allowances and relevant credits.340 75.764) The Group waived or did not claim default interest in the amount of CZK 2.261. • The hedge relationship is formally documented at the inception of the hedge. If the derivative hedges the exposure to changes in the fair value of assets and liabilities or commitments.832) 7. between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes multiplied by the enacted income tax rate for the period when the timing difference is expected to reverse.543) (1.416 904.419 49.781 2.109.006 11.162.008) 11. Gains (losses) from the changes in fair value are recorded in the profit and loss account in “Gain or loss from financial operations”. GAIN OR LOSS FROM FINANCIAL OPERATIONS CZK 000 2010 (124.838 91.273 1.531 (1. 3. (g) Leased Assets The Group depreciates assets leased to clients over the contractual life of the lease agreements.012 Other non-audit services Total (k) Financial Leasing Hedging Derivatives Hedging derivatives are carried at fair value.490) (557.175) (1. Gains (losses) from revaluing the interest bearing hedged item and hedging derivative are recorded in the profit and loss account in “Interest income and similar income” and “Interest expense and similar expense”.033) (175.900.673) (21. • The hedge relationship is highly effective throughout the accounting period.762) (2. Deferred tax is provided on all temporary differences CZK 000 Fee and commission income from payment processing lending activities other Total Fee and commission expense from payment processing other Total (217. All of derivatives (both trading and hedging) are contracted in the OTC (over-the-counter) market. the hedged item attributable to the risk being hedged is also carried at fair value.597 7. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) The valuation difference on acquired assets represents a positive or negative difference between the valuation of the business or part thereof acquired through the purchase and the sum of the carrying values of individual components of assets of the selling entity net of assumed liabilities. Gain/losses from derivatives operations Gain from currency exchange services Gain/losses from FX rate differences from revaluation Total The Group did not pay any bonuses tied to equity in 2010. FEES AND COMMISSIONS (j) Taxation Tax non-deductible expenses are added to and non-taxable income is deducted from the profit for the period in order to arrive at the taxable income.684 thousand.057 111.596 2010 4.723 537 15.236 2010 Employee expenses Wages and salaries Social and health insurance Of which wages and salaries paid to: Members of the Board of Directors Members of the Supervisory Board Other executives Other administrative expenses Of which expenses for services provided by the statutory auditor relating to Statutory audit Other assurance services Tax (6.375) 6.306.076) (461. INCOME FROM SHARES AND PARTICIPATION INTERESTS CZK 000 Income from participation interests with substantial influence Income from other shares Total 614 6. (11.477 44.581) (2. 8.302 Commissions from third parties Rent Sale of fixed assets Damages Corrections Insurance Income from financial leasing Other Total Other operating expenses Deposit insurance Royalties (134.147) (228. The Group uses all its trading investment derivatives for macro-hedging purposes. (h) Foreign Currency Translation Transactions denominated in foreign currencies are recorded in the local currency at the actual exchange rates on the date of the transaction. Foreign exchange gains or losses arising from the translation of assets and liabilities denominated in foreign currencies are recognized in the profit and loss account as “Gain or loss from financial operations”.64 GE Money Bank Consolidated Annual Report 2010 Notes to the Consolidated Financial Statements 65 2. Lease payments are recorded in “Other operating expenses”.967) Trading Instruments Financial derivatives held for trading are carried at fair value. Assets acquired under financial leases are recorded in “Tangible fixed assets” when the legal ownership is transferred to the Bank. The method of recognizing fair value depends on the model of hedge accounting applied. etc. The straightline method is used to recognize finance lease interest income over the contractual life. ADMINISTRATIVE EXPENSES CZK 000 2010 (2.353 27. using valuation models generally accepted on the market.758.422.674) 0 (79. The parameters used in these models are ascertained on the active market.940 190.181. The fair value of financial derivatives is determined as the present value of expected cash flows from these transactions.211 2010 Other Total Other operating expenses include a charge relating to the 2010 Agrobanka case settlement (refer to Note 25 and 33).918. • The effectiveness of the hedge relationship can be objectively measured.956) (52.150) 1. A negative difference on acquired assets is released into income over 60 months from the acquisition of the business or part. Sale of fixed assets Damages Withholding tax 5. yield curves. (i) Financial Derivatives Hedge accounting can be applied if: • The hedge is in line with the Group’s risk management strategy.178) (1. 188.870) (5.344 . Assets and liabilities denominated in foreign currencies together with unsettled spot foreign exchange transactions are translated into the local currency at the ČNB foreign exchange rate prevailing on the balance sheet date.412) (497. NET INTEREST INCOME CZK 000 Interest income – deposits – loans – debt securities Interest expense – deposits – loans Net interest income 2010 11.865) (1. such as foreign exchange rates.639 149. OTHER OPERATING INCOME AND EXPENSES CZK 000 Other operating income Service revenues 168. Advances received from clients are recorded in “Due to customers – cooperative savings association’s” and recognized as income through contractual life.980 389.669) (11.704.506) 10.946) (1.074) (678.724.

330 1.546 67.769).918.496.150) 75.608 103.870 During 2010 the Bank restructured receivables from customers totaling CZK 1.210 21.641 678.466) 1.926 602.66 GE Money Bank Consolidated Annual Report 2010 Notes to the Consolidated Financial Statements 67 9. RECEIVABLES FROM CUSTOMERS (a) Classification of Receivables from Customers CZK 000 Standard Watched Sub-standard 31.344 Financial institutions Non-financial institutions Government sector Non-profit organizations Entrepreneurs Resident individuals Non-resident individuals Total CZK 000 Personal guarantee 0 0 0 0 0 588 0 588 Bank guarantee 0 629.830 1.820.635 31. 12.023 15.907 116.344 received”.796 (54.370 (284.274 Doubtful Loss Adjustment to potential losses from receivables Net receivables from customers (15. 1.607 106.103.287 Unsecured 90.673.1.825.354 Total 2010 11. 1.165) 10.094 (671.003 . 2010 98.440 (623.175) 4. 2010 94.202 21.496.479.175) 4.031 17.980 (2.151).132.181.039 21.671 3.324 15.1.441.063 Total 105. 2010 106. 12.673.040) 614 (19.733 Bill of exchange 0 1.290 1. 2010 17.216. ADMINISTRATIVE EXPENSES (CONTINUED) The average number of the Group’s employees during the period was as follows: 2010 Employees Members of the Bank’s Board of Directors Members of the Bank’s Supervisory Board Other executives 3.246) 17.325 15. 2010 105.211.972. 12.517 89.330 43. Total In 2010. INCOME AND EXPENSE ACCORDING TO SEGMENTS a) Business Segments CZK 000 Personal banking and finance 2010 Interest income Interest expense Fee and commission income Fee and commission expense Gains or losses from financial operations 9.797 80.246.398 (4.302 10.283.956.378 Held by the Bank 0 75.893 3.990.095.612 Mortgage 14.576.920 7.135.992.797 118. the Bank provided a collateralized loan to an affiliate entity. (c) Analysis of Receivables from Customers by Sector and Type of Security Received b) Geographical Segments As at 31.142) 1.794.298.1.777.836) 53.470.122 0 4.732.150) 75.709) 3.687 1.2010: CZK 482.012 thousand (1.314) 21. CZK 000 2010 326.732.635 14.129.337 15.260 0 0 82.236 (678. The guarantee is reported in the off balance sheet in “Commitments and guarantees”.484.315 3.441.836. 12.401 1.975.396) (13.210 21.297 9.2010: CZK 7.575 14. TRANSACTIONS WITH RELATED PARTIES CZK 000 Receivable Payable 31. 1.646.917.760 587.477 (1.236 (678.325 1.965.855 Receivables from related parties contain mainly the loan granted to another GE entity within Central and Eastern Europe totalling CZK 11.842) 72. 2010 11.477 (1.871.1.162. Refer to Note 13 (b).315 3.495. 2010 8.043 3. 2010 8.003 2. RECEIVABLES FROM BANKS (a) Classification of Receivables from Banks CZK 000 Standard 31.206 7.732.588) 4. 1.049 thousand).003 1. 12.918.635 17.027 2.453 927.181.072.671 thousand (1.426) Income Expense 103.608 European Union 2010 62.939.378 0 0 0 0 0 1.2010: CZK 7.836.777.107 (1.352 0 0 711.341) 15.166) 1.108. 12.739.736.2010: CZK 7.920 3.468 13.473 Total 2010 11.806 0 0 3.069.258 thousand (1.162 (4. which are reported in the off balance sheet in “Collaterals and pledges CZK 000 Financial institutions Non-financial institutions 31.079.913 11.250.657 0 0 125.286 44.990.083 (1.210 9.350.342 Performance guarantee 0 52.797 118.348.337 15.847 28.400. for which it obtained a guarantee from the ultimate parent company of CZK 11. the Bank held state zero-coupon bonds under resale commitments with a market value of CZK 2.996 (12.907 116.672.012 1.722 thousand (1.258 0 37.517 89. INCOME AND EXPENSES RESULTING FROM PARTICIPATION INTERESTS WITH SUBSTANTIAL INFLUENCE CZK 000 Fee and commission expenses Dividends Total 2010 (20.300 0 6.025 120.265.162.192. In 2010. 2010 2.167 0 643.035 (b) Analysis of Receivables from Customers by Sector 12.382 Other 2010 30.982. 1.986.148. Government sector Non-profit organizations Entrepreneurs Resident individuals Non-residents Total The analysis of receivables by sector does not reflect adjustments.325 7.468 90.673.920 7.474 6.510 thousand).396 6 3 7 11.756.832 Net receivables from banks (b) Analysis of Receivables from Banks by Type of Security Received CZK 000 Security held by the Bank Guarantee from parent company Unsecured 11.975. 2010 CZK 000 Czech Republic 2010 Interest income Interest expense Fee and commission income Fee and commission expense Gains or losses from financial operations 11.479 89. 2010 15.226.871 Corporate banking 2010 2.659.

887 13. 2010 Market value 1. DEBT SECURITIES ISSUED BY OTHER ENTITIES (CONTINUED) (b) Classification of State Zero-coupon Bonds and Other 16.025 120.200 0 0 0 599 0 1.996. Na Vítězné pláni č. PSC 140 00 Service databank. 2010 0 0 Issued by financial institutions .597 31.265 44.205 6.466.222 118. 2010 751. 2010 120.358 3. 2010 Market value (c) Net Book Value of Bonds issued by Other Institutions CZK 000 Eurobonds available for sale Net book value 31.092.522 23. 2010 7. 2010 1.o.039 21.210 9. DEBT SECURITIES ISSUED BY OTHER ENTITIES (a) Net Book Value of State Zero-coupon Bonds and Other Securities Eligible for Refinancing with the ČNB CZK 000 State treasury bills State bonds Net book value 31.382 1.069. 12.783.597 28.667 12. 1.371 0 0 8.165 20% 20% 240 . 12.092.015 47. a.442 4. 1.094 22.083 Unsecured 88.861 Performance guarantee 0 108.026 The analysis of receivables by sector and type of security received does not reflect adjustments.069. Prague 4.468 90.Unlisted 4.065.200 3. a. SW. 12. 1.486 37.775 3. HW and network 1.479 89. Na Vítězné pláni č.190 6. 2010 Directors 0 0 Executives 5.015 5. 2010 office Business activity Other Registered categories capital of equity Share in equity Share of voting rights Book value The loans mentioned above were provided under standard employee conditions.433 2.946 Mortgage 18. 12. č.872 10.225 11.830 38.657 0 0 36.352 0 844.428 0 9.100 12.081 42.206 7.890 0 Supervisory Board 23 0 Total 17.460 0 0 0 0 0 214.200 3.803 Total 106.470.145.664 238.035 Securities Eligible for Refinancing with the ČNB into Individual Portfolios based on the Group’s Intention CZK 000 State zero-coupon bonds and other securities available-for-sale Net book value 11. 1.966 2.192. SHARES.015 43. Units and Other Investments Available for Sale CZK 000 31. 2010 15. 1. RECEIVABLES FROM CUSTOMERS (CONTINUED) (c) Analysis of Receivables from Customers by Sector and Type of Security Received (continued) 15.4. STATE ZERO-COUPON BONDS AND OTHER SECURITIES ELIGIBLE FOR REFINANCING WITH THE CENTRAL BANK.836.597 43. 1. 1.818. UNITS AND OTHER INVESTMENTS (a) Classification of Shares.083 Bill of exchange 0 214.799 Bank guarantee 0 330.431 3.488 1.Listed elsewhere . 2010 As at 1.353. 2010 8. 1719. 2010 1. 2010 118.699. 4 PSC 140 00 Service databank.561 0 0 134.027. 12.653 7. Prague 4.092. 12.059.458 CBCB – Czech Banking Credit Bureau.026 9. HW and network 1.843 17.460 Held by the Bank 0 102. 12. (e) Net Receivables from Customers Written-off and Recovered CZK 000 Write-offs Non-financial institutions Entrepreneurs Resident individuals Total Recoveries Non-financial institutions Entrepreneurs Resident individuals Total 1.432 23.990.949 622 43.349 1. o.864 120. 12.035 (f) Receivables from Persons with a Special Relationship to the Group Board of CZK 000 At 1. (d) Analysis of Receivables from Customers by Geographical Areas CZK 000 Czech Republic Slovakia Other Total 31.624.992.195. 2010 CZK 000 Personal guarantee Financial institutions Non-financial institutions Government sector Non-profit organizations Entrepreneurs Resident individuals Non-resident individuals Total 0 1.1719. units and other investments available for sale Net book value 47.233 108.458 31.p. 1.349 751.458 12.099 60.s.Unlisted Issued by non-financial institutions .354.713 31.013 11.466.667 1.909 6. 2010 At 31.466.s.360 727. p. SW. 2010 CBCB .266.372 66. č. Units and Other Investments into Individual Portfolios based on the Group’s Intention CZK 000 Shares. 12. 1. STATE ZERO-COUPON BONDS AND OTHER SECURITIES ELIGIBLE FOR REFINANCING WITH THE CENTRAL BANK.667 11.Czech Banking Credit Bureau.955.68 GE Money Bank Consolidated Annual Report 2010 Notes to the Consolidated Financial Statements 69 14. PARTICIPATION INTERESTS WITH SUBSTANTIAL INFLUENCE CZK 000 Registered Name As at 31.636 0 374.195 80. 2010 (b) Analysis of Shares.751 112.003 1.576.608 103. The analysis of receivables by geographical areas does not reflect adjustments.680 2.308 20% 20% 240 As at 1.642 47.

400.796 2.574) 346.674 (2.379 (3.270) (11.575 0 12.418) 0 (3.427 158. 12.375 5.383) 0 3.252) (770.r.575 7.992 (27.711 0 73.869) 0 751.389 (4.898.557 0 (2. of CZK 5.664 (773) (54) 0 827 0 (2.092) 0 0 0 0 (1. 21. Vyskočilova 1422/1a.440 1.12.575 5.697) (1.096 2.301.2010 Amortization and adjustments As at 1.674 (2.120.966) 3.812. 12.957.411 (3.356) (350.12. OTHER ASSETS CZK 000 Other debtors 31.592 The item Other cash values includes cash in transit.634 540. 1.765) (30.923 6.037 1. 12.2010 Additions Disposals As at 31.o.092 0 0 2.511 (3. 2010 308.039) 0 (1.490 9.299) 0 2. 2010 Charge for the period Change adjustments Disposals As at 31.923 6.2010 Net book value As at 31.234 200 0 200 Profit for 2010 Book value Adjustments to finance assets Valuation as at 31.803) (2.121 (3.o.446 Establishment costs 2.669 3.027 1.929 1. 1.056) 0 0 0 5.70 GE Money Bank Consolidated Annual Report 2010 Notes to the Consolidated Financial Statements 71 18.452 9. 207/84. 2010 Net book value As at 31.282 296.682 Repayable on demand Up to 3 months Total 19.r.678 68 898.722 (1. 2010 198.112. 2010 370.353 366.375 5. 12. 12.511) 17.946) 0 (244.006.610 (32.617 Other cash values Receivable to state bodies Clearing account for payments Other Positive fair value of derivatives Accruals Deferred tax assets Inventory Less: Adjustments Total 0 18.511 (1. 2010 347.12.817) 30.848.403.367 0 1.413 (381.2010 Inkasní a exekuční servis s.591 367.375 0 12. 1.606) (5. Rudolfovská tř.105 33. 12.057 (10.092 Assets not yet in use 161.163.394 1.019.079 1. 370 01 České Budějovice 100% 100% Debt recovery services Technical advisory in agriculture and woodcraft industry As at 31.422 16.425) 17.294.770 672. 2010 20.924.092) 0 0 (2.489) 0 68 4.815 (1. TANGIBLE FIXED ASSETS (a) Movements in Tangible Fixed Assets Other and low value Furniture Land and CZK 000 Cost As at 1.317. 12.445.1. 2010 Inkasní a exekuční servis s.836 1. leases for fixed assets in 2010. 2010 As at 1.847.576) (1.949.864.625 21.238) 11. 207/84.548 74. During 2009 RCE released an adjustment to AgroConsult Bohemia s. INTANGIBLE FIXED ASSETS (a) Movements in Intangible Fixed Assets CZK 000 Software and other intangible fixed assets As at 1.690 200 0 200 12.236 9.752 92.986.711 74.957 1.749 239.158.073) 3.072 209.425.949 1.652 6.049 12.581 (24.047 1.108) (30.329 98.404 The financial statements of the above un-consolidated entities were not audited both as at 31 December 2009 and 2010. 12.367 (244.r.156 (94.579 (170.140 940.271 76.071 6. 140 28 Prague 4 AgroConsult Bohemia s.380 (323. 370 01 České Budějovice 100% Technical advisory in agriculture and woodcraft industry As at 1.897 346. 1.392) 3.431.712. 2010 As at 31.480.643 0 346.957) 2.218) 2.536.079 Total 3.649 12.895) 2.785) 0 1.324) 0 0 0 0 0 0 0 0 0 0 244.947. 2010 689.460.213 65.222) (60.437 98. DUE TO BANKS Analysis by Residual Maturity CZK 000 31.2010 817.504 (170.o. 12.098 14.213) 2. Vyskočilova 1422/1a. 1.395.097 14.961 65.965 Buildings and Fittings Equipment tangible fixed assets Leased Assets Land and buildings not yet in use Other Fixed Adjustments Assets not yet in use – valuation difference Total 244.757.296.548) 14.511) 0 6. 2010 131.119) 0 65.375 18.806 Amortization and Adjustments As at 1.1.r. 140 28 Prague 4 100% Debt recovery services AgroConsult Bohemia s. PARTICIPATION INTERESTS WITH CONTROLLING INFLUENCE CZK 000 Group’s share Business activity Value of the share in equity as at 31.262.2010 Charge for the period Disposals As at 31. 2010 Additions Disposals Transfers As at 31.o.426) (b) Tangible Fixed Assets held under Finance Leases The Group is not committed to any payments under finance 22.r.719 1.376 552 1. 2010 12.o.213) 2. .264) (350.713 (1.949 102.140 14.1.204 (159.640 238. Rudolfovská tř.923 thousand.

12. DUE TO CUSTOMERS (a) Analysis by Sector CZK 000 Repayable on demand At 31.734 250.261 0 (13.918.165 3.180.161 2. 12.076.786 251.475 75. (c) Provisions for Leased Assets CZK 000 Balance as at 1.182 676.297. OTHER LIABILITIES CZK 000 31.2010 Creation during the current year Use during the current year Balance of provisions as at 31. 12.719 7. Delaware. Cover of losses from loans sold Release of adjustments no longer considered necessary Creation and use of adjustments (2.677 562.740 1.316 (417.270 4. 2010 (5.450 1.133.218 17.208.259 37. 2010 Financial institutions Non-financial institutions Insurance institutions Government sector Non-profit organizations Entrepreneurs Resident individuals Non-residents Total 1.165 (197) 4. 12.951) 0 31. 12. 12.194.801 3.831 0 0 0 0 0 0 989. 12. GE Capital International Holdings Corporation intends to use this amount to increase the Bank’s registered capital.184 605. REGISTERED CAPITAL In order to establish the Bank.490 0 0 0 0 0 0 758.418 (b) Due to Persons with a Special Relationship to the Group 24.309 Savings with notice Term deposits with fixed maturity Other Total 25.586 242.796 694.142 Release of provisions no longer considered necessary Balance of provisions as at 31.892.285 636.321 431. The increase in registered capital was recorded in the Commercial Register on 25 March 2003.972 Executives 18.103 24.724 0 8.524 1.000.262 71.507.098 21.030. 2010 Financial institutions Non-financial institutions Insurance institutions Government sector Non-profit organizations Entrepreneurs Resident individuals Non-residents Total 946.166 867.017) 31.436 7.563 16.591 (399) Board of CZK 000 As at 1.000 each. 1.252 170.226 477.828 962.333 2. Each share was issued at a premium of CZK 1.431.609 367.431.581 82.897. 1.896.328 58. 12.377. 12.114 529. part of this provision was used to satisfy the conditions of the settlement concluded in 2010 (refer to Note 33).604 302. In 2010 the Bank did not issue any ordinary shares.192. v likvidaci case. 2010 692. 2010 18. 1.000 million for such shares.367 Trade payables Payables from deposit insurance Payables to state bodies Payables from social and health insurance Accruals Negative fair value of derivatives (c) Due to Participation Interest with Substantial Influence The Group had no amounts due to participation interest with substantial influence as at 31 December 2010.142.884 110.626.245 337.674 951.101.785 4.1.497.569. 2010 170.s.000. 1209 Orange Street.1.551 1.388) CZK 000 Repayable on demand Savings with notice Term deposits with fixed maturity Other Total include: Name Seat Number Ownership % Wilmington.053 53.744 19. The balance as at 31 December 2010 in the amount of CZK 422 million will be used to complete the settlement.428. 2010 852.72 GE Money Bank Consolidated Annual Report 2010 Notes to the Consolidated Financial Statements 73 23.141 GE Capital International Holdings Corporation No person with a special relationship to the Bank held any of the Bank’s shares as at 31 December 2010. 2010 Creation during the current year Use during the current year 55. In the current period.734 6.699 52.285.255. Clearing technical account Other Total (b) Provisions for Litigations within consolidated entities Balance of adjustments as at 31.096 (1.921 3.2010 Additions Disposals As at 31.276. The increase in the clearing technical account balance as at 31 December 2010 reflects the changes in the Bank’s internal process of clearing with the Czech National Bank.418 993.423 762.688 80 3. 2010 13.641.000 per share and paid CZK 2.320) 94.548 7.571 4. 2010 Directors 3.566 138. a.083.927 3.791.367 450.513. 2010 5. Balance as at 1.615.433 90. 1. USA 510 100 Balance as at 1.288 41.016.954 14. 2010 706.949 2.840) 4.481 (d) Adjustments to Customer Receivables CZK 000 31.1.968 0 8.036 18. 12.396 (e) Adjustments to Operational Receivables CZK 000 Balance as at 1.595 0 25 0 0 846. PROVISIONS AND ADJUSTMENTS FOR POSSIBLE CREDIT LOSSES (a) Provisions for Guarantee Losses within consolidated entities Balance of adjustments as at 31.282 7.732 10.920 35.097 CZK 000 31.485) 7.970.642) (81.248 5.290 94. 2010 (61.399 3. 1.350.217 608.397 CZK 000 Balance as at 1. The shareholders of the Bank as at 31 December 2010 Included in the total provison is a provision of CZK 800 million created in 2007 for an anticipated settlement in the Agrobanka Praha.215.756. 12.754 1.215 1.254) (1.336 0 130 0 0 557.621 917.974. GE Capital International Holdings Corporation subscribed 500 shares of original capital with the nominal value of CZK 1. 12.836 10.966 0 (11. 2010 Creation during the current year Use during the current year Balance of provisions as at 31. 2010 .073 The item “Other” includes mainly CZK 327 million obtained from GE Capital International Holdings Corporation.164 70. 2010 820.397 471.723 108. In 1998 the Bank issued 10 ordinary shares with the nominal value of CZK 1.750 thousand and was paid in full.000 63.020 131. 12.344 622 1.036 15.438.706 1.753 4.507. As of 25 March 2003 the registered capital of GEMB was CZK 510 million.926.444.174) 466.765.444) 26.484.783 47.2010 Creation during the current year Use during the current year Release of adjustments no longer considered necessary Creation and use of adjustments (32.939.177. 2010 31.951 0 0 15.717 435.916 5. 2010 FX rate differences Creation during the current year Use during the current year Write-off of loans and advances At 1.421 Supervisory Board 4.545 29.

002. 12.082. 2010: CZK (368. 1. 1.570 (23.696 thousand) and liabilities from fixed term transactions in the amount of CZK 2.098) (315.228 thousand).701) (117.631.930) (68.217.640) 1.000) (7. Deferred income tax assets and liabilities are attributable to the following items: and endorsements Payables resulting from guarantees Letters of credit and financial guarantees Total 0 7.088) 9.947.600 11. i.845) 0 0 0 1. 2010 1.098) (368. 2010 Decrease Increase Balance at 31.840.546. 2010 before allocation of 2010 profit Profit for 2010 Proposed allocation of 2010 profit: Transfer to retained earnings (3.511) 3.965) (11. 2010 Fair value 31.1.865 thousand (1.000 946.468) (20. RETAINED EARNINGS.000 (8.2010: CZK 10. OFF-BALANCE SHEET (a) Irrevocable Contingent Liabilities arising from Acceptances and Endorsements.081 Hedging instruments Interest rate swap contracts 8.197) The total net fair value of hedging instruments in the amount of CZK (315.410 (816.040 96.040) Hedging instruments Interest rate swap contracts Total Trading instruments Forward foreign exchange contracts Forward Purchase Forward Sale Interest rate swap contracts 946.547) thousand (1.696 thousand).511 17.431.000 0 0 9. 12.74 GE Money Bank Consolidated Annual Report 2010 Notes to the Consolidated Financial Statements 75 27.899) (2.508.490.2010: CZK 7. 19% for 2010 onwards.217.367 thousand (1.025) (106. All the above transactions were concluded on the interbank market (over-the-counter). 2010 (c) Guarantees Issued in favour of Participation Interests with Substantial Influence The Group did not issue any guarantees in favour of participation interests with substantial influence as at 31 December 2010.838.874) Total 29. 2010 Available for sale securities 50.656 63.040 7.312 Forward foreign exchange sale contracts Interest rate swap contracts Up to 3 months 3 months to 1 year 1 year to 5 years Total 0 8.459.601.833 (1.098) thousand (1.640.427 (953.630 7.171 152.1.795) 0 137.801 (96.495 15.828) 1. 2010 Hedging instruments Interest rate swap contracts Trading instruments Forward foreign exchange purchase contracts Forward foreign exchange sale contracts Interest rate swap contracts At 1. 12.801 (96. 2010 CZK 000 At 31.634.111 (280. 12. 12.801 (96. VALUATION DIFFERENCES CZK 000 Balance at 1.732. 2010 1.631.804 102.394.471. 2010 1.040 (315.926 (357) 5 1 1.511 3.014) (111. Total net fair value of trading instruments of CZK (20.246.742) (858.030 3. 2010 12.1.2010: CZK 7.181. 1.2010: 20%) Tax discount and offsets used Own tax base Tax calculated using a tax rate of 15% Current income tax Additional income tax relating to previous years Current income tax 1.394.425 13.934.598) 7. 12.500 (13.352.843.000) thousand) corresponds to the difference of receivables from fixed term transactions of CZK 2. (c) Income Tax Expense CZK 000 Deferred income tax Income tax due Income tax expense 2010 493.364.640) 1.000 96.625 (14. 12.e.000 (215.630 809.630 11.547) (106.318 thousand (1.601.000 Profit Retained earnings Statutory reserve fund 30.556 Trading instruments Forward foreign exchange purchase contracts 656. OFF-BALANCE SHEET (CONTINUED) (b) Guarantees Issued in favour of Persons with a Special Relationship to the Group The Group did not issue any guarantees in favour of persons with a special relationship to the Group as at 31 December 2010. 1.646 0 80.776) 10.394.458 13.394.348 10.861 0 12.981 2010 4.389) 1.040 0 7. 1. RESERVE FUNDS AND OTHER FUNDS ALLOCATED FROM PROFIT The Bank proposes to allocate the 2010 profit as follows: CZK 000 Balance at 31. 2010 1.217.155.427 (953.041) (23.500 96. 28.1.666 988.757 1.711.018.376.079) 25 11. 2010 1.2010: CZK 10.404 (83.267) (145. INCOME TAX AND DEFERRED TAX ASSET / LIABILITY (a) Current Income Tax CZK 000 Current year profit before tax Current year profit before tax – influance of consolidation Income not liable to tax Tax non-deductible expenses Items increasing the tax base Items decreasing tax base Subtotal Income tax calculated using a tax rate of 19% (1.776) 0 0 0 700.909) (e) Residual Maturity of Financial Derivatives 30.675 14.566.634.490 940.1.701) thousand) corresponds to the difference of receivables from fixed term transactions in the amount of CZK 11. 1.500 .527 thousand) and liabilities from fixed term transactions in the amount of CZK 12. (d) Off-balance Sheet Financial Instruments CZK 000 Contractual amounts 31. 1.517 CZK 000 Deferred tax assets Credit provisions Tax loss carry-forward Other reserves Deferred tax liability Penalty interests Tangible and intangible fixed assets 31.703.640.465 thousand (1.618 Revaluation of available for sale fi nancial assets Discounted loans receivable Net deferred tax asset/(liability) 1.376.2010: CZK (106.000 (b) Deferred Tax Liability/Asset Deferred income taxes are calculated on all temporary differences using the tax rate in the year of the expected reversal of the timing difference.645 33.640.352.367.701) (368.776) 10.231 501. Other Written Contingent Liabilities and Assets Pledged as Collateral CZK 000 Customers Notes acceptances 31.1.742 1.017 (136.601.

) Credit Risk Credit risk is the risk of loss for the Bank resulting from the failure of a counterparty to meet its obligations arising from the terms and conditions of the contract under which the Bank became the creditor of this counterparty. (A. including identification and classification models and key risk indicators. Capital Allocation) Governance & Control Committee (Corporate Govemance. • Ensures the development. • Ensures credit approvals. approved commercial loans. and • Monitoring of the adequacy.c. market. • Supervises all rating and scoring models and processes (including methodology development. and liquidity risk management with the aim to ensure GEMB risks are managed reliably and efficiently. • In the case of operations on money markets requires its counterparties to have at least an A-1 (Standard & Poor’s) / P-1 (Moody’s) rating. The ERM Department is responsible for the key parts of credit. • Sets terms and conditions for granting credit. and liquidity risk management. (A. the Risk Division: • Monitors. Operational Risk) Credit Risk Market Risk Liquidity Risk Asset & Liability Capital Allocation Operational Risk • Prepares risk reports for the ALCO. monitoring and measurement. both on an enterprise basis and at the level of the consolidated Group: • Coordinates all activities of credit. The Bank has sufficient information about the debtor's financial situation and the current value of the debtor's internal rating is better than 8.) Risk Management Organizational Structure (continued) (A. (C. The Credit Monitoring and Management Committee (CMMC) monitors and manages the credit risk of the commercial credit portfolio. approval of remedial measures in the case of exceeded limits or unfavorable development trends. the following tasks. analytical skills and technologies. The Bank/the Group is exposed to credit risk in particular in the case of credits granted. and regular reviews and back testing). the Bank relies on the qualifications and experience of its employees. implementation and validation of models. Among other things. and • Minimizes potential losses from operational risk via economically efficient remedial measures. or commodities for the purpose of achieving speculative profits. implementation and maintenance of reserve and capital allocation models. The members of these committees include members of the Board of Directors and other senior managers of the Bank. natural persons acting as entrepreneurs. and • Carries out operations on the money market exclusively for liquidity management purposes. and the use of sophisticated analytical instruments and technologies. • Maintains and develops the methodology of calculating and allocating regulatory and economic capital.) Risk Management Committees The Bank has three main risk management committees: the Asset & Liability Committee (ALCO) for assets and liabilities management. market. • Administers the data infrastructure and analytical systems supporting risk management. None of the receivables from the debtor have been restructured in the last 2 years due to the deterioration in the debtor’s financial situation. in particular in the area of methodology. operational and liquidity risks and proposes remedial measures in the case of exceeded limits or unfavorable trends. both on an enterprise basis and at the level of the consolidated Group: • Monitoring of the development of relevant risks. development or selection. and small and medium-sized enterprises. CRCO and GCC. of 15 May 2007. the organizational segregation of duties. The CRO is a member of the Board of Directors of the Bank. 123/2007 Coll. The level of risk is measured in terms of its impact on the value of assets and/or capital and the profitability of the Bank.) Level of Risks Accepted The Bank’s business activities are primarily directed at providing deposit. Liquidity. guarantees provided. CMMC was established by the GEMB Chief Risk Officer (CRO) and its members are experienced managers of the Risk Division and the Commercial Banking Division. • Develops and maintains the methodology of operational risk management. reliability and efficiency of risk management’s internal regulations. limits.76 GE Money Bank Consolidated Annual Report 2010 Notes to the Consolidated Financial Statements 77 31. operational.) Risk Management Organizational Structure CEO Supervisory Board (portfolio monitoring) The Risk Division is responsible for risk management. non-approved current account debits. This combination of a prudent approach. • Coordinates the effort to maintain a stable asset and liability structure and the value of capital. • Implements and maintains the processes and infrastructure for recording and analyzing operational risk data. and interbank deals. support the Bank’s success and the stability of its economic results. which stipulates prudential rules for banks. • Uses financial derivatives exclusively for risk management purposes. CREDIT AND OPERATIONAL RISK (CONTINUED) (A. The committees carry out in particular the following. CREDIT AND OPERATIONAL RISK Risk Management The aim of the Bank is to achieve within its business activities competitive yields at an acceptable risk level.) Risk Division 31.a.b. (A. In this respect. scenario assumptions and any other parameters used in the process of risk management.) Enterprise Risk Management The Enterprise Risk Management Department (ERM) is a part of the Risk Division. The same objectives and principles are used in the framework of the consolidated Group. operational. the Credit Committee (CRCO) for credit risk management issues. • Approval of the principles of risk management as well as the basic methods. The categorization is as follows: Receivables Without Debtor Default The Bank assigns receivables without debtor default to the following sub-categories: a) Standard Receivables A receivable is regarded as “standard” if there is no reason to doubt that it will be repaid in full. credit unions and investment firms. The ERM Department performs. FINANCIAL INSTRUMENTS – MARKET. When managing risks. both on an enterprise basis and at the level of the consolidated Group. The Bank’s strategy is to avoid all risks that are not associated with its main line of business and to minimize all other risks. among other things. the Governance & Control Committee (GCC) for the management and control system and operational risk management. Risk management covers control of risks associated with all business activities in the environment in which the Bank operates and ensures that the risks taken are in compliance with the prudential limits. Internal Audit. letters of credit issued. with none of them being more than 30 days past due. mortgages and automatically approved commercial loans. the Bank evaluates potential effects of changes in political. The aforementioned principles are applied in the framework of the consolidated Group as well.a. and • Ensures the collection of receivables from individually CRO PMT Consumer Risk Board of Directors Commercial Risk Enterprise Risk Management Credit Committee (Credit Risk) Asset & Liability Committee (Asset & Liability. market and operational conditions and changes of clients’ creditworthiness on its business.) Categorization of Receivables The Bank assigns receivables into individual categories in compliance with CNB Decree No. (C. transaction and credit services for retail clients. • Monitors fraudulent operations and is involved in the prevention and investigation of fraud. processes and limits. The Bank: • Does not trade in equity or debt securities. currencies. . Compliance. measures and reports credit. The Bank includes in this category receivables where the principal and accessions are being duly paid. the head of the ERM Department is approved by the Bank’s Board of Directors. market risks and liquidity risk management and the internal capital adequacy assessment process. (B. together with adherence to procedural measures. market. Market Risk. economic. including the observance of limits. FINANCIAL INSTRUMENTS – MARKET.

and • Adjudication of bankruptcy or an authorization to discharge. and • The debtor’s internal rating is 9. • The debtor had its consumer loan repayments deferred less than 12 months ago. The expectation is that such receivable will not be repaid or will only be repaid in part in a very small amount.) Collateral Assessment (continued) To determine the realizable value of collateral. which are approved by the CRCO. Coefficient Method: Adjustments to individually approved small and mediumsized enterprises’ loans.and medium-sized enterprises (SME) that are granted credits on the basis of an automated approval process (based on scoring models). given the debtor’s financial and economical situation. where the probability of default (PD) and discounted recoveries are applied.e. The Bank has its own rules and methodology for the collateral assessment and regularly reviews the values of correction coefficients. Commercial exposures cover credit risk associated with The methods described below apply to the whole GEM Group. • Bank guarantees. the automated approval process is supplemented with individual assessment. CREDIT AND OPERATIONAL RISK (CONTINUED) (C) Credit Risk (continued) (C. Receivables within the Group are categorized according to the same principles. 31.e. • Financial situation of the debtor.) Collateral Assessment The Bank requires collateral covering credit receivables either by means of an individual assessment of the obligor or as a standard part of the given credit product. and • Internal rating of the debtor is 8. Statistical models for watch receivables and receivables with debtor’s default are based on discounted life-time recoveries capped at 48 months. including secured troubled debt restructuring. Clients in default constitute the tenth rating class. Receivables meeting at least one of the following criteria are also considered sub-standard: • A debtor’s receivable has been restructured owing to a worsening financial situation within the last 6 months.) Categorization of Receivables (continued) b) Watch Receivables A receivable is regarded as “watch” if. • Reliable receivables.) Credit Risk (continued) (C. if any.) Credit Risk Management The field of credit risk management is divided into two main domains. but none of them are more than 90 days past due. The Bank includes in this category receivables where the principal or accessions are being paid with some problems. applying coefficient and statistical methods. The Bank includes in this category receivables where the principal or accessions are being paid with problems. given the debtor’s financial and economical situation. (C. (C. • Cash.) Internal Rating The Bank uses an internal statistical model to estimate the probability that its commercial clients will default. and small. 123/2007 Coll. to which credits are provided on an individual basis. c) Loss Receivables A receivable is regarded as “loss” if. (C. but with none of them being more than 360 days past due. • Sub-standard 20% • Doubtful 50% • Loss 100% Statistical Method: Adjustments for products where the coefficient method is not applied (un-secured products) are based on statistical . • The debtor had repayments of a mortgage loan deferred more than 18 months and less than 3 years ago.b. A receivable is also considered doubtful if a competent court has issued a decision on settling the debtor’s bankruptcy via a discharge from debts or reorganization. b) Doubtful Receivables A receivable is regarded as “doubtful” if.c. but with none of them more than 180 days past due. secured consolidations and inventory financing. given the debtor’s financial and economical situation. Coefficients are applied to the gross book value of an individual receivable reduced by the realizable value of collateral as follows: • Watch 1% exposures to small and medium-sized enterprises (SME). FINANCIAL INSTRUMENTS – MARKET. Credit risk management in the mortgage business has a specific position as mortgages form part of the retail exposures. Coverage levels (ratio of statistical estimate of losses to the portfolio) derived from models for a given product are applied to the gross book value of the individual receivables. Retail exposures include credit risk associated with exposures to natural persons. The Bank involves in this category receivables where the principal or accessions are being paid with problems. and • Movable assets (machinery. • The debtor had repayments of a consumer loan deferred more than 12 months and less than 30 months ago. a department operating independently of the Bank’s business units.b. The PD is scaled to a loss identification period of 6 months. its full repayment is uncertain. (C.a. The ultimate realizable value of collateral is then set by applying the correction coefficient reflecting the Bank’s ability to realize the collateral in case of need. natural persons acting as entrepreneurs.) Commercial Banking (SME Credits) (C. although its partial settlement is highly likely.) Adjustment Calculation models developed according to the Decree. As a result of the merger statistical methods have been consistently applied for all un-secured products of the GEM Group since 2010. • Securities.1. (hereinafter “Decree”).d. • The debtor had its mortgage loan repayments deferred less than 18 months ago. Receivables With Debtor Default Receivables with debtor default are considered nonperforming receivables. None of the receivables towards the debtor have been restructured in the last 6 months owing to a deterioration in the debtor’s financial situation. The categorization in 2010 was carried out on a daily basis and the evaluation concerns in particular the following: • Debt service performance. equipment. reorganize. receivables meeting at least 1 of the following conditions are also included in this category: • The Bank does not have sufficient information on the debtor's financial situation more than 30 days after the date when this information was to be provided to the Bank. This change in the estimate had no material impact on the adjustments reported. For car financing products. • Guarantee of a reliable third party. In addition. The Bank considers the following types of collateral to be acceptable to decrease the gross credit exposure for the purpose of calculating the adjustment: Adjustments are calculated according to Decree of the Czech National Bank No. The rating model assigns clients that are not in default to 9 rating classes (rated 0 to 8). The Bank assigns them to the following subcategories: a) Sub-standard Receivables A receivable is regarded as “substandard” if. given the debtor’s financial and economical situation. mortgage loans. breeding stock). are calculated using the coefficient method defined in the Decree. The average contractual interest rate for a particular product line is used as the discount rate. FINANCIAL INSTRUMENTS – MARKET. • Restructuring of the debt. but a number of the processes and methods used fall within the category of commercial exposures. although its partial settlement is possible and likely. The principles above are applied in a consistent manner within the whole Group. Statistical models for standard receivables are based on the incurred but not recognized loss principle. the Bank uses external expert appraisals or internal assessments made by the Collateral Management Department of the Risk Division. its full repayment is impossible. are approved by the CRCO. The prediction power of this rating tool is reviewed annually and changes in the model. • Meeting of the obligation regarding information with respect to the Bank. CREDIT AND OPERATIONAL RISK (CONTINUED) (C. • Real estate properties. if any. and exposures to banks and institutions. its full repayment is highly unlikely.78 GE Money Bank Consolidated Annual Report 2010 Notes to the Consolidated Financial Statements 79 31. The Bank involves in this category receivables where principal or accessions are more than 360 days past due. it is likely to be repaid in full. or settle the debtor’s property. A receivable from a debtor who is subject to bankruptcy or settlement proceedings is also considered to be a loss receivable.

(C. Approval strategies are set by the Risk Division.e. counterparties and economic sectors. The outcomes are regularly discussed by the CRCO. In the event of a significant change in the macroeconomic environment. The percentage of accounts that moved to the doubtful or loss categories during the period is calculated. Moody’s. the coverage calculated shows what part of the accounts is recovered during 48 months. the debtor’s internal rating. or commodity. and uses external data sources including credit registers. for which it requires a minimum short-term rating of A-1 / P-1 / F1. If no solution is found within 60 days after the due date. and Fitch. if necessary or required by CRCO.e.) Credit Risk (continued) (C.) Retail Banking (C. internal scorings are used. Risk Division underwriters may approve individual exposures The Bank has implemented its own IT solution supporting the process of SME credit approval and administration facilitating the preparation of credit applications. an economically related group of persons. For these loans.) Credit Risk Measurement Models (continued) The main tool for measuring the credit risk of countries and counterparties (institutions) with respect to transactions in financial markets is the rating of international rating agencies: Standard & Poor’s. which also decides on categorization changes in cases when the change does not clearly follow from the categorization rules. This department deals with debtors and discusses possible solutions. product and collateral. The outputs of the statistical models are reviewed annually using the data as at 30 September.e.) Approval Process The SME credit approval process is based on individual evaluation and each exposure has to be approved by two persons with appropriate approval authorities. b) Watch Receivables and Receivables with Debtor Default The migration among delinquency categories over the period of 48 months is monitored. FINANCIAL INSTRUMENTS – MARKET.f. (D. (C. b) Watch Receivables and Receivables with Debtor Default The percentage of receivables for each particular category that are not repaid in a given period are identified. a) Standard Receivables The coverage coefficient for standard receivables is based on the gross coverage and the discounted recovery percentage.f. the Bank analyzes in particular the financial situation of the debtor and the persons economically related to the debtor.g. For loans whose full repayment was enforced at the beginning of the period.f. The repayment percentage identified hereby is discounted using the average interest rate for the given portfolio and is applied as a coverage coefficient to the particular category of receivables. and represents the Bank in creditors’ committees in the event a debtor declares bankruptcy.e. This percentage is discounted by the average interest rate applicable to the given portfolio.) Monitoring The Risk Division regularly monitors individual retail portfolios. (C. 31. the Group applies the following approaches to the coverage calculation: Mortgages are approved individually by the Risk Division underwriters on the basis of individually set approval authorities. Given the different nature of individual products.3.4.2. (C. receivables from the automatically approved commercial credits and mortgages are transferred to the administration of the Remedial & Collection department of the Risk Division.) Collection The Collections unit of the Operations Division is in charge of the initial phase of collection. Apart from some selected products permitting the granting of credits by 2 commercial bankers from the Commercial Banking Division. Individual monitoring and any potential remedial measures are dealt with by the CMMC. For car financing products approval process is automated and supplemented with individual assessment. The probability of default (PD) is scaled to the loss identification period set at 6 months (C. Other receivables are collected by the Collections unit of the Operations Division with the aim of achieving maximum recovery.) Interest Rate Risk Interest rate risk is the risk of a loss arising from changes of interest rates on financial markets. Within the frame of the approval process. sector.f. that do not pass the automatic approval process. the gradual pattern of repayment of receivables is reflected in the model.) Approval Process The approval process in the retail exposures segment is (with the exception of mortgages) based on the use of internally developed scoring models and the access to external data sources (in particular credit registers). These statistical models classify individual clients into categories of homogeneous exposures using sociodemographic and behavioural data. the review is performed more frequently. FINANCIAL INSTRUMENTS – MARKET.3.) Financial Market Operation Exposures (C.) Credit Risk (continued) in legal proceedings or to sell receivables. The Group uses external agencies and/or sales of receivables in the collection process as well. The PD is scaled to the loss identification period set at 6 months. The development of these scoring models and approval strategies is carried out by the PMT Department of the Risk Division. as well as different volumes in these periods. evaluates collateral. the Remedial & Collection Department of the Risk Division administers receivables whose recoverability is endangered. Reports on the quality of the SME portfolio are discussed by the CRCO each month and. the CRCO also deals with individual credit exposures. and monthly reports on the quality of retail portfolios are presented to the CRCO. maturity. including receivable restructuring.) Claiming of Debtors’ Receivables In order to achieve maximum recovery.2. • Models for Unsecured Revolving Loans When approving retail exposures. (C. .) Scoring Instruments (C. a) Standard Receivables The coverage coefficient for standard receivables is based on the gross coverage and the discounted recovery percentage.80 GE Money Bank Consolidated Annual Report 2010 Notes to the Consolidated Financial Statements 81 31.h. Approval authorities are set on an individual basis and are determined by combining the level of exposure. The system enables access to financial analysis tools including internal ratings. (E.f. Its activities in the area of interest rate risk management are aimed at reducing the risk of losses. The Group manages the risk of concentration through limits applicable to countries.) Risk of Concentration The risk of concentration means the risk arising from the concentration of exposures with respect to (one) person. The Group is exposed to interest rate risk as interest bearing assets and liabilities have different maturity periods or interest rate change/adjustment periods.) Commercial Banking (SME Credits) (C. Repayments of receivables are monitored over the product life time of 48 months. region. all other credits have to be approved by an authorized employee of the Commercial Banking Division and by an authorized employee of the Risk Division.5. CREDIT AND OPERATIONAL RISK (CONTINUED) (C. the linking thereof with data warehouses. In order to ensure methodological and factual accuracy.) Credit Risk Capital Requirement The Bank uses the standardized approach (STA) in the credit risk capital requirement calculation both on an enterprise basis and at the level of the consolidated Group.4. The average contractual rate is used to discount the expected payments on a product-byproduct basis. document storage and the subsequent production of contract documentation.f.) Monitoring All SME clients are monitored both individually and on the portfolio basis. The Group strives to minimize interest rate risk. ERM checks them and regularly monitors the predictive power of individual models. activity. The Group sets individual limits for individual countries and institutions.1. The CRCO approves any update of the coverages.f. takes relevant legal steps to realize collateral in order to collect receivables • Models for Unsecured Closed-End Loans and Troubled Debt Restructuring (C.4.) Credit Risk Measurement Models The models reflect the historical performance of the portfolios by product line. (C. CREDIT AND OPERATIONAL RISK (CONTINUED) (C.

891 0 1.827. interest rate derivatives are used in most cases.199 27. • Ratio of the absolute value of the net currency position in Czech Koruna to capital. For other currencies.830 115.635 106.298 15. the Group carries out stress testing based on the parallel shift of the yield curve by 200 basis points for all currencies that account for more than 5% of the Group’s assets.604.985.896 12.294 367.208 0 3. if a net currency position of a currency exceeds a given limit. The currency positions.459 0 0 Prepaid expenses and accrued income Total Due to banks and credit institutions Due to customers Other liabilities Accrued expenses and deferred income Total Gap Cumulative Gap At 1. • Absolute value of the total currency position . The same methods of measurement. To diversify and stabilize liquidity sources and to deposit excess financial assets.438 296. arise only in the Bank’s portfolio.625 9. The Bank strives to minimize foreign exchange risk.489. The model is based on the inclusion of interestsensitive assets and liabilities into relevant time bands.083.922.728 16. 2010 CZK 000 At 31.979. CREDIT AND OPERATIONAL RISK (CONTINUED) (G.580 0 0 9.338 (55. • VaR (maximum expected loss per business day at the 99% confidence level) for the foreign currency portfolio. 2010 Cash and deposits with central banks • Ratio of assets to liabilities in each time band.265.044. on a daily basis. monitoring and control At 31.349 47.284 4.010.466. 1.917.056.82 GE Money Bank Consolidated Annual Report 2010 Notes to the Consolidated Financial Statements 83 31. credits taken.695. For To monitor and measure interest rate risk.349 0 Up to 3 months this purpose.071 0 102. 12.026 26. significantly increases the flexibility of source acquisition and reduces the dependency on partial sources.257.698. 2010 21 0 6.056.) Foreign Exchange Risk Foreign exchange risk is the risk of a loss owing to changes in the market exchange rates of the individual foreign currencies in the Group’s portfolio. In 2010 the 5% share of the Group’s assets was exceeded only by the portfolio denominated in Czech Koruna.313.870 Debt securities Receivables from banks Receivables from customers (continued next page) .814 0 4. as well as the Bank’s equity.529. the Bank applies a system of the following limits: 2. which are based on the analysis of historical data.434 26.748 33. a model of interest rate sensitivity is used. The model works with 1-month time bands up to the 10 year period and a time band exceeding 10 years. and • Assessment of the impact of the liquidity management stress scenarios on the Bank’s liquidity position.907 16.830.811) (81. The Bank has access to diversified sources of financing.171.762. The ERM regularly reviews the contingency plan and liquidity management scenarios.659 (10.051.000 0 35. As other members of the consolidated Group are financed by the Bank.433 0 5.132 0 0 0 2.020) 0 12.944. The financing sources consist of savings and other deposits.992.309 29.808 11. The Bank prefers to use behavioral features of cash flows rather than those that are purely contractual. • Ratio of highly liquid assets to the total deposit base.713 38.894.996. represent the Group’s exposure to foreign exchange risk.177.591 8.116 0 2. The Residual Maturity of the Group’s Assets and Liabilities 3 months to 1 year 1 year to 5 years Over 5 years Without specification Total For the purpose of liquidity management under extraordinary circumstances. the Bank uses. net currency positions and a VaR model based on historical data.865. To measure interest rate risk.975 140.946 0 37.439. of foreign exchange risk are also used on a consolidated basis.674 100.575 6.680 28. To manage the liquidity risk for main currencies. All behavioral assumptions are approved regularly by the ALCO.015 3.504 2.12.129 10. • Ratio of highly liquid assets to expected outflows.405 27.975 15.129.222.887 7.802 25.495 751.809 0 244.092.932. which.026 140.079.314 12.015 378.048. which measures net cash flows in set time bands.779 Simultaneously.612 0 0 135.109) 0 0 0 29. • Ratio of the absolute value of the total currency position to capital. (F. the Bank maintains a balance of assets and liabilities in foreign currencies and uses the following limits: • Ratio of the absolute value of the net currency position to capital for each foreign currency.546.607 751.424 0 47.723. Interest rate risk management uses the following limits: (G.238. units Participation interests with substantial influence Participation interests with controlling influence Other assets 0 0 0 0 240 240 Liquidity risk is the risk of losing the ability to meet financial liabilities when due or losing the ability to finance assets.801 3.943 1.604. At 31. FINANCIAL INSTRUMENTS – MARKET.409 0 0 1.997.071. and • Impact of stress test on capital (Tier 1 and Tier 2).364 (17.140 45 3.752.790.573 3.854 1. 1.400 0 27.941. FINANCIAL INSTRUMENTS – MARKET. the money market and bond market is used.024.020 12.325 103.732.752.458 17.069 37.555.279. including offbalance sheet exposures. CZK 000 VaR of currency instruments 2010 48 Average for 2010 52 At 1.249 (81. 12.667 15.680 0 0 244. the Bank uses limits for the ratio of quickly liquid assets to liabilities.147 0 0 0 1.859.811) 0 8. 1.228 999. together with the diversification of other sources of financing.639 0 246.119 0 30.473) 0 0 0 43. which serves to determine the sensitivity of the Group to changes in market interest rates.719 110.499.380. and • Ratio of assets to liabilities for each foreign currency. Assets and liabilities in foreign currencies.575 4. (share of the balance sheet total exceeding 5%) includes: • Calculation of the liquidity position based on the liquidity gap model. Average for CZK 000 VaR of interest rate instruments 2010 361.027.) Liquidity Risk Receivables from customers Debt securities Shares.663.898 115. 31.949 0 21. • Calculation of the expected outflow (99% quantile of the distribution of a one-day outflow of cash from GEMB in the given period).) Liquidity Risk (continued) Bank also has a flexible credit line within the General Electric Group.664.830. CREDIT AND OPERATIONAL RISK (CONTINUED) (E. the Group also applies the historical method of calculating Value at Risk (VaR) for the investment portfolio at the confidence level of 99%. • Liquidity positions in individual time buckets.) Interest Rate Risk (continued) To measure foreign exchange risk.308. the Bank has a contingency plan containing measures for recovering liquidity.685.086. and forwards them to the ALCO for approval.103 3.596 2010 At 1. liquidity management on a consolidated basis is executed within the Bank's liquidity management via the inclusion of credit exposures to the consolidated Group. the Bank uses a 1-year horizon for calculating VaR.2010 Cash and deposits with central banks State debt securities Receivables from banks 1.459 296.870. Taking into account the stable structure of the investment portfolio with respect to the interest rate risk. however. To manage the discrepancy between the interest sensitivity of assets and liabilities. The daily measurement of liquidity risk in main currencies 0 1.321 0 5.673.005. and • Volume of assets intended to cover the stress scenario.325.

854 0 140. To mitigate the operational risk.) Three-Year Forward-Looking Capital Outlook The Bank used the alternative standardized approach (ASA) to calculate the capital requirement for the operational risk on an enterprise level in 2010.) Operational Risk Management (continued) • Credit risk.842 195.121 37.118. once a year GEMB designates a 3-year capital outlook.124 (7. Key risk indicators are monitored as well. (H.366.833) (62.713 0 0 5. and • IT disaster recovery plans (activity recovery plans) for key IT applications.405.404 93.) Liquidity Risk (continued) Residual Maturity of the Group’s Assets and Liabilities (continued) 3 months CZK 000 Debt securities Shares. . with the aim to ensure business activities at a backup workplace. or by adopting an action plan to reduce the potential impact.231.256) Over 5 years 0 0 0 0 0 0 37. the collection of data on loss events). which includes base case development expectations and at least one scenario of stressed development.516.841.885 195. based on one base case and two stress scenarios.520 0 8. including the risk of loss owing to the breach of or non-compliance with a legal or a regulatory standard or to endangerment to the Bank’s reputation.747.023. whether the identified risks will be covered by an additional stock of capital. The basic limit for the operational risk management is the operational risk tolerance (represented as the expected loss caused by operational risk in the given year). and indicators. and use of technologies.404 108.648. an outlook of the internal capital requirement and an outlook of capital sources. process changes.246. The confidence level used in the ECAP model is set up to respect the General Electric Group target rating AAA. or owing to external circumstances. FINANCIAL INSTRUMENTS – MARKET.754.837 0 5. If the same principles were applied to the data as at 1 January 2010 the amount of CZK 8. • Business risk: a risk that GEMB will miss its planned profit due to common volatility in business volumes. During the workshop.) Calculation of Operational Risk Capital Requirement are identical to the regulatory capital. CREDIT AND OPERATIONAL RISK (CONTINUED) (G. Stress scenarios are The increase in receivables from customers reported under the “Without specification” category was caused by the change in the applicable Czech National Bank reporting methodology (watch receivables and receivables with debtor default are excluded from the assigment of residual maturity) . including concentration risk.685 128.819. units Participation interests with substantial influence Participation interests with controlling influence Other assets Prepaid expenses and accrued income Total Due to banks Due to customers Other liabilities Accrued expenses and deferred income Total Gap Cumulative Gap Up to 3 months 0 0 0 0 166.540. which was developed in 2008 to assess its internal capital requirement.235.141 37. the human factor or systems. The CRO approves models and their modifications. FINANCIAL INSTRUMENTS – MARKET. measurement. GEMB uses a model called “ECAP”. The limit is approved by the GCC on the basis of the outcomes of the annual RCSA process (Risk Control Self Assessment). In addition. Events whose impact exceeded the limit (CZK 10 thousand) are the subject of the data collection.597 240 6. • Transfer of the risk via outsourcing or insurance.166 1. effects. The ECAP model covers all regular risks that are identified as material for GEMB and for which GEMB decided to reserve capital. The operational risk measurement uses the LDC process (Loss Data Collection.a. which is needed to cover unexpected losses in the following 12 months on a chosen confidence level.437 0 95. introduction of limits and checks.007 (62. (H. risk factors.586.805.652 6. based on expert judgment.119 20. the ALCO decides.872.662 0 28.) Operational Risk (continued) (H. 32. takes place at the end of each accounting period. • Operational risk.962 0 0 31. The procedure is processed both on an enterprise basis and at the level of the consolidated Group. the Bank uses identification and classification models to identify and describe events. NTERNAL CAPITAL ADEQUACY (A.615.) Internal Capital Requirement on the One-Year Horizon Internal capital requirement represents the stock of capital.402.833) to 1 year 0 0 0 0 1. organization. monitoring and control of operational risk are also used on a consolidated basis. Currently. measured by CAR (Capital Adequacy Ratio).929 7. Capital sources for covering internal capital requirements The same methods of identification.575 147.805. Currently. Calculations show that CAR would not drop below 10% (target capital adequacy ratio).652 5.211.575 37.a. GEMB will have enough capital sources to cover both regulatory and internal capital requirements under both stressed cases. Individual organizational units have operational risk coordinators who provide employees with methodological support in the area of the operational risk management and who cooperate with the ERM in activities relating to operational risk. CREDIT AND OPERATIONAL RISK (CONTINUED) (H.525 0 881. by creating a specific reserve.599 166.620. the capital outlook shows that. (B.733 29.446.453 (41. the Bank produces and maintains: • A business continuity plan for critical situations and operations recovery. In addition to internal capital requirement assessment.572 0 8.240.133.174 672.121 0 0 140. The capital outlook includes an outlook of the regulatory capital requirement.516.713 34.380) 1 year to 5 years 0 0 0 0 0 0 39.) Operational Risk Management Within the scope of operational risk management. After identifying any risks.962 672.477 Without specification 0 43.210 thousand would be added to the “Without specification” category.641. and • Avoidance of the risk by terminating risk-inducing activities.118.694 128.929 147.) Operational Risk Operational risk is defined as the risk of a loss owing to the drawbacks or failure of internal processes. The standardized approach (TSA) was used to calculate the capital requirement for operational risk on a consolidated basis for the rest of the consolidated Group.84 GE Money Bank Consolidated Annual Report 2010 Notes to the Consolidated Financial Statements 85 31.087. • Interest rate risk in the banking book. even in the worst case scenario both on an enterprise basis and at the level of the consolidated Group.477) 0 Total 0 43.023. Stressed cases are based on stress scenarios that reflect a significant downgrade of risk factors that could occur approximately once in 25 years. The ERM maintains the models following the Basel II methodology and notifies the GCC of changes. the organizational structure. (H.002 (29. risks are identified that may become material in the following year.329 0 33.b.542 36. Risks covered by the ECAP model are: developed in cooperation with the senior management team and discussed at a separate workshop.597 240 6. It also covers legal risk.635. a workshop with the senior management team and applies the following methods: • Mitigation of the risk by means of process improvements.

from 22 June 1998 (see the Annual Report for 2009).86 GE Money Bank Consolidated Annual Report 2010 Independent Auditor’s Report to the Shareholders of GE Money Bank.s. 34. a. 87 33. the settlement process has been progressing satisfactorily and initial settlement conditions have been satisfied. Following satisfaction of initial settlement conditions. The settlement process will continue in the next accounting period. LITIGATION In the past. including the withdrawal of the lawsuits. a. A. INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS OF GE MONEY BANK. SUBSEQUENT EVENTS There have been no events subsequent to the balance sheet date that require an adjustment of or disclosure in the financial statements or notes thereto. v likvidaci case on 1 July 2010. . part of the provision created for this case was used (refer to Note 25).s. In the following months.s. which contested the validity of the agreement on the sale of a part of the enterprise of Agrobanka Praha. a. three lawsuits against the Bank as a defendant were filed.S. The Bank concluded a settlement agreement with the involved parties of the Agrobanka Praha.

Statutory Body's Responsibility for the Financial Statements The statutory body of GE Money Bank. We conducted our audit in accordance with the Act on Auditors and International Standards on Auditing and the relevant guidance of the Chamber of Auditors of the Czech Republic. revenues and net result for the year then ended in accordance with Czech accounting legislation.88 GE Money Bank Consolidated Annual Report 2010 Independent Auditor’s Report to the Shareholders of GE Money Bank. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Licence number 71 Prague. is responsible for the preparation of financial statements that give a true and fair view in accordance with Czech accounting legislation and for such internal controls as the statutory body determines are necessary to enable the preparation of financial statements that are free from material misstatement. 20th April 2011 In our opinion. vložka 24185. We have audited the accompanying financial statements of GE Money Bank. s. the auditor considers internal controls 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. a Czech limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative („KPMG International“). Vladimír Dvořáček Partner Ing.s. a. s. 89 Auditor’s Report KPMG Česká republika Audit.cz Auditor’s Report (continued) Independent Auditor’s Report to the Shareholders of GE Money Bank. The procedures selected depend on the auditor's judgment. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. as well as evaluating the overall presentation of the financial statements. as of 31 December 2010. and the notes to these financial statements including a summary of significant accounting policies and other explanatory notes. r. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. 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.kpmg.s. whether due to fraud or error.. including the assessment of the risks of material misstatement of the financial statements.s. Obchodní rejstřík vedený Městským soudem v Praze oddíl C. Opinion KPMG Česká republika Audit. whether due to fraud or error.o. s. a. a. but not for the purpose of expressing an opinion on the effectiveness of the entity's internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management. IČ 49619187 DIČ CZ699001996 . Pobřežní 648/1a 186 00 Praha 8 Česká republika Telephone Fax Internet +420 222 123 111 +420 222 123 100 www.. which comprise the balance sheet as of 31 December 2010. o.s.r. and the income statement for the year then ended. the financial statements give a true and fair view of the assets and liabilities of GE Money Bank. r. In making those risk assessments. a. Information about the company is set out in Note 1 to these financial statements. Pavel Závitkovský Partner Licence number 69 KPMG Česká republika Audit. Ing. o. and of its expenses. a Swiss entity. a.s.

a. 91 FINANCIAL STATEMENTS OF GE MONEY BANK. Name of the Bank: GE Money Bank. s. a.s. Prague 4 Identification no: 25672720 Business: Bank Date of preparation: 20 April 2011 Code of the Bank: 0600 Year ended: 31 December 2010 .90 GE Money Bank Consolidated Annual Report 2010 Financial Statements of GE Money Bank.S. Regestered office: Vyskočilova 1422/1a. A.

968 1.701.321 1.362 26 26 17.377 20 96.861 50.847 695.669 23 2. 12.373.238.000 4.840 2.s.951 510.821 16.517 63.393 98.935 139.128.816 24 510.458 12.000 27 63.534 96..525 792.861 15.576.519.000 4.986 14 97.262 25.092.357 143.726.254 131.945.078 CZK 000 1 Due to banks and cooperative savings associations of which: a) repayable on demand b) other payables 2 Due to customers .349 16 17 17 18 19 47.909.458 17.489 774.951 0 0 825.804 3.140.098 12.911 22 109. The notes set out on pages 97 to 123 form part of these financial statements.620.000 50.217.674 198.696 27 97.964 134.158 2.583 83.488 825.517 20 2.466.889.834.748 39..357 0 0 0 43.965 384. 2010 658.367.362 The notes set out on pages 97 to 123 form part of these financial statements.663.597 240 0 929.620 108.349 0 751.261.576.681.087 26 102.281 1.000 510.515 466. 1.816 2.511 139.634 526. 93 ASSETS Balance sheet as at 31 December 2010 LIABILITIES Balance sheet as at 31 December 2010 CZK 000 1 2 Cash in hand and balances with central banks State zero coupon bonds and other securities eligible for refinancing with the CNB of which: a) securities issued by the government institutions 3 Receivables from banks and cooperative savings associations of which: a) repayable on demand b) other receivables 4 Receivables from customers .092.000 102.945.426.078 15 11.466.444 94.667 13 15.458 15.707.446 15.cooperative savings association's members of which: a) repayable on demand b) other payables 4 5 6 Other liabilities Deferred income and accrued expenses Provisions of which: a) provision for pensions and similar obligations b) provision for taxes c) other 8 Registered capital of which: a) registered paid up capital 9 10 Share premium Reserve funds and other funds from profit of which: a) statutory reserve funds and risk funds 13 Gains (losses) from revalution of which: a) assets and liabilities 14 15 Retained earnings from previous years Profit for the accounting period Total liabilities note 21 31.832. .000 510.035.195 110.437.942.214 17. 2010 3.742 112.486 1.92 GE Money Bank Consolidated Annual Report 2010 Financial Statements of GE Money Bank.657 0 229.891.261. 12.504.667 11.015 240 6.cooperative savings association's members of which: a) repayable on demand b) other receivables 5 Debt securities of which: a) issued by government institutions b) issued by other entities 6 7 8 9 10 Shares.979 102. a. 2010 3.904 351.461. mutual fund certificates and other investments Participation interests with substantial influence Participation interests with controlling influence Intangible fixed assets Tangible fixed assets of which: land and buildings for operating activities 11 13 Other assets Prepaid expenses and accrued income Total assets note 31. 1. 2010 296.142 15 751.620.000 102.668.389 134.

212) 76.223 5.531 Off-balance sheet assets 1 3 4 6 Commitments and guarantees granted Receivables from spot transactions Receivables from fixed term transactions Receivables written-off 29 17.595.685 8.211 614 0 6.511 The notes set out on pages 97 to 123 form part of these financial statements. 25 14. 2010 CZK 000 1 Interest income and similar income of which: interest income from debt securities note 4 2010 9.160 14.566 53.492) (2.858 3. 11 12 13 17 19 23 24 b) other administrative expenses Depreciation.763. 2010 1.824 30.559 18.164) 7.904.932 140. administration and deposit 67..172.204.249.067) (4.757.207 61.009.345.597 Off-balance sheet liabilities 9 10 11 12 14 Commitments and guarantees received Collateral and pledges received Payables from spot transactions Payables from fixed term transactions Values taken into custody.330 123.s. creation and use of adjustments and provisions for receivables and guarantees Creation and use of other provisions Current year profit (loss) from ordinary activities before tax Income tax Net profit for the accounting period 28 14.657 (426.94 GE Money Bank Consolidated Annual Report 2010 Financial Statements of GE Money Bank.851.678.. 1.337. creation and use of provisions and adjustments to tangible and intangible FA Release of adjustments and provisions for receivables and guarantees.422.485.279. 25 25 2.575.115 (633.643 18.658) 353.843 (794.190 190.604) 3.550 10.921) (449.818.636) (1. 95 OFF-BALANCE SHEET ITEMS PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2010 CZK 000 note 31.217.105 55.585.715) (492. .014 14.907 536.924 13.681 4 5 6 7 8 9 Commission and fee income Commission and fee expense Gain or loss from financial operations Other operating income Other operating expenses Administrative expenses of which: a) employee expenses of which: aa) social and health insurance 6 6 7 8 8 9 3.315 138.561 (4. a. 12.375) The notes set out on pages 97 to 123 form part of these financial statements.241.559 2 3 Interest expense and similar expense Income from shares and participation interests: of which: a) income from participation interests with substantial influence b) income from participation interests with controlling influence c) income from other shares and participation interests 4 5 (1. income from written-off receivables Write-offs.760 30.

986. Year ended: 31 December 2010 .96 GE Money Bank Consolidated Annual Report 2010 Notes to the Financial Statements of GE Money Bank.656 24.s. 12.315 12.861 0 24.000 capital 510.108 3. 1.108 0 4. A. 2010 0 0 0 510.. 2010 FX gains (losses) and gains (losses) not included in the profit and loss account Valuation difference of merger influence Net profit for the accounting period Balance as at 31.732.979 Reserve Revaluation Profit (loss) 17.656 0 0 63.644 funds gains (losses) 102. 97 STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2010 Registered CZK 000 Balance as at 1.919 NOTES TO THE FINANCIAL STATEMENTS OF GE MONEY BANK.701.367.511 25.517 0 0 3. a.000 50.217.087 0 0 0 102.585.726.804 Total 22.000 12. The notes set out on pages 97 to 123 form part of these financial statements.000 Share premium 4.511 20.S.217.

was renamed GE Money Bank. GE Money entities in the Czech Republic underwent legal restructuring in 2010 as follows: • GE Money Auto. The fair value used to revalue securities is determined based on the market price published as of the date of the fair value measurement. based on the Bank’s intention. as a part of a rebranding initiative that was implemented around the world by the parent company General Electric Company. a. bonds and other debt securities and shares including share units and other investments are classified into the portfolio that is held to maturity. The aim is to use the worldwide experience of GE Money not only to allow uniform communication. the condition of securities liquidity is fulfilled.o. bank’s notice. a. but also to improve processes. dated 6 November 2002. Accrued interest income is part of the carrying amount of these securities. or the available for sale portfolio. a bank that had previously been put under enforced administration by the Czech National Bank. financial derivatives. Court in Prague. If it is not possible to determine whether the market value represents fair value (i. then merged with the Bank on 30 September 2010 (whereas the merger’s decisive date was 1 January 2010) and ceased to exist. • The GE Money Multiservis. if. or the present value of the security for debt securities. Business Firm and Registered Office GE Money Bank. a. the date of purchasing or selling of foreign currency or securities. formerly GE Capital Bank. Entry No.. A financial asset or part thereof is derecognized from the Premiums and discounts on debt securities are amortized/ accreted through the profit and loss account over the period from the date of purchase to the date of maturity using the effective interest rate method.r.s. (hereinafter the “Bank” or “GEMB”) was established on 9 June 1998 by a capital contribution from GE Capital International Holdings Corporation in the amount of CZK 2. BASIC INFORMATION (CONTINUED) (c) Comparative Information The legal restructuring in 2010 discussed above results in incomparable information for the current and preceding periods in certain components of the financial statements. • The second part. SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies adopted in the preparation of the financial statements are set out below. For debt and equity securities traded on the public market.s. balance sheet if the Bank loses control over the contractual rights to the financial asset or part thereof. is outside the local GE Money Group as at 31 December 2010. fair values are equal to the price reached on the public market of OECD countries. the date of payment or collection from a customer's account. s. s. the date of an order to a correspondent to make a payment. except for selected financial instruments that are measured at fair value.3 billion). In the case of securities. the Board of Directors changed as follows: • On 6 April 2010 Jiří Báča was appointed as a member of the Board of Directors. the trade date and settlement date of transactions with securities... the date of issue or receipt of a guarantee or opening credit line. s. • The ownership interests in Inkasní a exekuční servis. strengthen our mutual relationships.s. a. a. the portfolio valued at fair value through the profit and loss.s. (GEMM) enterprise was divided into three parts. subsequently transferred the ownership interest in GEMA to the Bank. which comprised the auto loans business (the auto loan portfolio at the net book value of CZK 4. The adjusted value of the securities is equal to the share proportion of equity for shares.r. From this initial capital.98 GE Money Bank Consolidated Annual Report 2010 Notes to the Financial Statements of GE Money Bank.s. BASIC INFORMATION (a) Establishment and Description of the Bank GE Money Bank.s. (b) Basis of Preparation The financial statements have been prepared on the basis of the accounting records maintained in accordance with the Act on Accounting and the relevant regulations and decrees of the Czech Republic. 5403 Members of the Board of Directors and Supervisory Board as at 31 December 2010 Members of the Board of Directors Peter Ronald Herbert (Chairman) Christoph Glaser Brett Matthew Belcher Rajesh Ramakrishna Gupta Jiří Báča Wade Udell Robison Changes in the Board of Directors and Supervisory Board In 2010. a newly acquired subsidiary of the Bank. i.o. were transferred to the Bank from GEMM. • GE Money. the share proportion of a fund’s net assets value for units. They have been prepared under the historical cost convention on the basis of full accrual accounting. Treasury bills. Units and Other Investments Treasury bills. the transaction date is defined as the date of payment or collection of cash. a.s. and GE Money Multiservis. a. no comparisons are presented in the profit and loss account and related footnote disclosure. bank statement or other documents). the cash and equity accounts. Vyskočilova 1422/1a 140 28 Praha 4. the value date according to a statement received from a Bank’s correspondent (statement means SWIFT statement. if the Bank does not prove that it is possible to sell securities for such a market price). Members of the Supervisory Board Robert Charles Green (Chairman) Aleš Blažek Pavel Zídek January 2010. 501/2002 Coll. which have a residual maturity of less than 1 year from the date of purchase.r. Shares. The Bank loses this control if it exercises the rights to the benefits defined in the contract. Michle Czech Republic – registered in the Czech Republic by the Municipal Identification Number: 25672720 1. • The first part. When the security is sold. The financial statements have been prepared in accordance with Czech Ministry of Finance Decree No.e. Organizational chart (as at 31 December 2010) see page 18. The balance sheet comparatives show the opening balances as at 1 (b) Debt Securities. Accounting transactions involving the purchase or sale of financial assets with a usual term of delivery (spot transactions) and fixed term contracts shall be are recorded in off-balance sheet accounts from the trade date until the settlement date. . Therefore. foreign currency.. as at the decisive date of the merger of the Bank with GE Money. units and other investments are recorded at acquisition cost. a. the settlement date of the Bank’s payment orders with the ČNB clearing centre. Shares. the credit cards and consumer loans business (financing receivables at the net book value of CZK 5.. These financial statements are unconsolidated financial statements.000 million.s. or the date of acceptance of values into custody. On 17 January 2005 GE Capital Bank.s. • The remaining part of GEMM.e. was contributed into GEMA. Section B. and heighten successful cooperation with clients.s. if such rights expire or the Bank waives the rights. the date of purchase. which regulates the layout and definition of financial statements and disclosure requirements for banks and certain financial institutions.o. units and other investments are measured at fair value.o. a. 2. • On 7 December 2010 Wade Udell Robison was appointed as a member of the Board of Directors. (GEMA) changed its legal form from a joint-stock company to a limited company. Only debt securities can be classified into the portfolio held to maturity. at the same time. (a) Transaction Date Depending on the type of transaction. as amended. 99 1. and gains/losses from this revaluation are charged to equity in “Gains (losses) from revaluation”. the respective revaluation difference is charged to the profit and loss account in “Gain or loss from financial operations”. the premium and the discount are amortized/ accreted equally through the profit and loss account over the period from the date of purchase to the date of maturity.. the acquired assets and liabilities were recorded in the Bank’s balance sheet at the values determined based upon the purchase agreement. Numbers in brackets represent negative amounts. s.r. the fair value is estimated as an adjusted value of securities. was contributed into GE Money. a.o.r. as its sole shareholder. the Bank purchased selected assets and liabilities from Agrobanka. Available for sale securities and shares. if the Bank proves that securities can be sold for that market price. and AgroConsult Bohemia s. On 22 June 1998. received media. bonds and other debt securities are recorded at amortized/accreted cost.e. i.9 billion).

Adjustments to accrued interest income are established in accordance with the appropriate requirement of the ČNB. The method of recognizing fair value depends on the model of hedge accounting applied.s. • The hedge relationship is formally documented at the inception of the hedge. (g) Foreign Currency Translation Transactions denominated in foreign currencies are recorded in the local currency at the actual exchange rates on the date of the transaction. Hedge accounting can be applied if: Leasehold improvements are depreciated on a straight-line basis over the shorter of the lease terms or their remaining useful lives. All of derivatives (both trading and hedging) are contracted in the OTC (over-the-counter) market. “probable” meaning a probability exceeding 50 percent. The parameters used in these models are ascertained on the active market. creation and use of adjustments and provisions to receivables and guarantees”. The legal title of securities subject to resale or repurchase commitments is transferred to the lender. The tax-deductible portion of the period charge for the creation of adjustments for credit losses is calculated in accordance with the requirements of Section 5 (“Banking provisions and adjustments”) and Section 8 (“Adjustments to receivables from debtors subject to bankruptcy or composition proceedings”) of the Act on Provisions No. Units and Other Investments (continued) Transactions where securities are purchased under a commitment to resell (resale commitment) are treated as collateralized lending transactions. . SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (b) Debt Securities. Receivables are reviewed for recoverability. • It is probable or certain that the event will occur and that it will require a cash outflow representing economic benefits. To the extent that a customer repays any portion of the receivable in excess of the discounted value originally assigned to the receivable. this difference is recorded as operating income. If the derivative hedges the exposure to changes in the fair value of assets and liabilities or commitments. The valuation difference on acquired assets represents a negative difference between the valuation of the business or part thereof acquired through the merger and the sum of the carrying values of individual components of contributed assets net of assumed liabilities. Adjustments created by debiting expenses are past events. income from written-off receivables”. Receivables are written off when the Bank has determined the receivable to be permanently irrecoverable. such as foreign exchange rates. • The hedge relationship is highly effective throughout the accounting period. volatility of financial instruments.cooperative savings association’s members”. using valuation models generally accepted on the market. • The hedge is in line with the Bank’s risk management strategy. creation and use of adjustments and provisions to receivables and guarantees” in the profit and loss account. Participation interest with controlling/substantial influence is valued at acquisition cost net of adjustments owing to the temporary decrease in the value of the participation interest calculated on an individual basis. reported in “Write-offs. • The amount of such performance can be reliably estimated. Adjustments and provisions are reduced in an amount equal to the amount written off on the same account in the profit and loss account. The Bank also accrues interest income from classified receivables. a. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (f) Intangible and Tangible Fixed Assets Tangible and intangible fixed assets are stated at historical cost and are depreciated using the straight-line method over their estimated useful lives. Adjustments are created against specific receivables when considered appropriate. Interest on debt securities received under a resale commitment is not accrued. The lending granted under a resale commitment is recorded in “Receivables from banks and cooperative savings associations” or “Receivables from customers . • The effectiveness of the hedge relationship can be objectively measured. A provision represents a probable cash outflow of uncertain timing and amount. (e) Creation of Provisions 2. Participation interest with substantial influence is one in which the Bank holds at least 20 percent of a subject’s registered capital but not more than 50 percent or one arising from an agreement or from articles of association regardless of the percentage of participation. Recoveries on loans previously written off are included in the profit and loss account in “Release of adjustments and provisions for receivables and guarantees. Income arising under resale commitments based on the difference between the selling and purchase price is accrued over the period of the transaction and recorded in the profit and loss account as “Interest income and other similar income”. Securities received under a resale commitment are recorded in off-balance sheet accounts in “Collaterals and pledges received”. Gains (losses) from the changes in fair value are recorded in the profit and loss account in “Gain or loss from financial operations”. Shares.100 GE Money Bank Consolidated Annual Report 2010 Notes to the Financial Statements of GE Money Bank. the hedged item attributable to the risk being hedged is also carried at fair value. (c) Participation Interest with Controlling/Substantial Influence Participation interest with controlling influence is one in which the Bank holds at least 50 percent of a subject’s registered capital or one arising from an agreement or from articles of association regardless of the percentage of participation. etc. The methodology for the creation of adjustments in the appropriate accounting period is included in Note 30. Provisions are established if the following criteria are met: • A duty (legal or factual) to perform exists. The annual depreciable lives for each category of intangible and tangible fixed asset are as follows: Software Cars Technical improvement of buildings Furniture Equipment Establishment costs – other intangible fixes assets PCs and servers 5 years 3 years 5 years 4 years 10 years 10 years 5 years (h) Financial Derivatives Trading Instruments Financial derivatives held for trading are carried at fair value. Hedging Derivatives Hedging derivatives are carried at fair value. yield curves. 593/1992 Coll. A negative difference on acquired assets is released into income over 60 months from the acquisition of the business. Intangible fixed assets costing less than CZK 60 thousand and tangible fixed assets costing less than CZK 40 thousand with a useful life less than 1 year are charged to the profit and loss account in the period in which they are acquired. Receivables from customers purchased from a third party are initially recorded at discounted values from the gross receivables actually due under the contracts with customers. • It is expected that the hedge relationship will be highly effective throughout its life. Gains (losses) from revaluing the interest bearing hedged item and hedging derivative are recorded in the profit and loss account in “Interest income and similar income” and “Interest expense and similar expense”. The fair value of financial derivatives is determined as the present value of expected cash flows from these transactions. Accrued interest income is part of the carrying amount of receivables. resulting from (d) Receivables from Banks and Customers Receivables are carried net of adjustments. Assets and liabilities denominated in foreign currencies together with unsettled spot foreign exchange transactions are translated into the local currency at the ČNB foreign exchange rate prevailing on the balance sheet date. 101 2. Foreign exchange gains or losses arising from the translation of assets and liabilities denominated in foreign currencies are recognized in the profit and loss account as “Gain or loss from financial operations”. The Bank uses all its trading investment derivatives for macro-hedging purposes. The write off of unrecoverable receivables is accounted for as “Write-offs.

197) (139) (8.024 26. ADMINISTRATIVE EXPENSES CZK 000 Employee expenses Wages and salaries Social and health insurance 2010 (1.429) (449.from loans Net interest income 2010 9.724.907 2010 (124.1.485.104) (2. 103 2.921) (1. 1.136) (426.152 Interest 0 0 The Bank waived or did not claim default interest in the amount of CZK 2. 2010 Controlling Substantial interest Receivable Payable 501.117 625. OTHER OPERATING INCOME AND EXPENSES (CONTINUED) CZK 000 Other operating expenses Deposit insurance Royalties Sale of fixed assets Damages (134.422. OTHER OPERATING INCOME AND EXPENSES The average number of the Bank’s employees during the period was as follows: (b) Receivables and payables from participation interests with a controlling or substantial influence CZK 000 31.903 76. 2010 17.818.980 381.from loans .012 thousand (1.2010: CZK 7. GAIN OR LOSS FROM FINANCIAL OPERATIONS 3. CZK 000 Gain/losses from derivative operations Gain from currency exchange services Gain/losses from FX rate differences from revaluation Total 189.164) (1.026 CZK 000 Other operating income Service revenues Commissions from third parties Rent Sale of fixed assets Damages Corrections 27.028.526. 2010 Controlling Substantial Interest 8. a.597 7.580) 0 (41.s.008) 11. 5.876 127. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (i) Taxation Tax non-deductible expenses are added to and non-taxable income is deducted from the profit for the period in order to arrive at the taxable income.286) (430.946 1. Refer to Note 13 (b).208 4. Deferred tax is provided on all temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes multiplied by the enacted income tax rate for the period when the timing difference is expected to reverse.478. CHANGES IN ACCOUNTING POLICIES The Bank did not make any changes in its accounting policies in 2010.from debt securities Interest expense .396) (18.843 (continued next column) Employees Members of the Board of Directors Members of the Supervisory Board Other executives 2010 2.474 1.190 38 803 9 115 856 190.902) (794.037 (20.854) 289. CZK 000 Income 2010 657.790 1.886 99.781 1.715) Receivables from related parties contain mainly the loan granted to another GE entity within Central and Eastern Europe totaling CZK 11. 9.067) 2010 10. 1.860. NET INTEREST INCOME The Bank did not pay any bonuses tied to equity in 2010. 2010 12.076) (209.345 522 15. FEES AND COMMISSIONS CZK 000 Fee and commission income from payment processing lending activities other Total Fee and commission expense from payment processing other Total (217. RECEIVABLES AND PAYABLES FROM PARTICIPATION INTERESTS WITH A CONTROLLING OR SUBSTANTIAL INFLUENCE (a) Transactions with related parties CZK 000 Receivables Payables 31.595.777.808 16.531 (1.492) 11.636) (5.664 7.from deposits . Lease payments are recorded in “Other operating expenses”.201 (99. Insurance Other Total .457 112.369.241.657 2010 Withholding tax Other Total Other operating expenses include a charge relating to the 2010 Agrobanka case settlement (refer to Notes 25 and 32).975. CZK 000 Interest income .646 6 3 7 2010 Expense 8.000 3.951 536.040) 614 59.423 66.151).212) 1.012 Of which wages and salaries paid to: Members of the Board of Directors Members of the Supervisory Board Other executives Other administrative expenses Of which expenses for audit. legal and tax advisory services Total (55. TRANSACTIONS WITH RELATED PARTIES.028 856. INCOME AND EXPENSES RESULTING FROM PARTICIPATION INTERESTS WITH CONTROLLING/SUBSTANTIAL INFLUENCE CZK 000 Interest income and similar income Fee and commission income Fee and commission expenses Dividends Other operating income Other administrative expenses Total 2010 237. INCOME FROM SHARES AND PARTICIPATION INTERESTS CZK 000 Income from participation interests with substantial influence Income from other shares Total 614 6.682 Interest 0 0 1.345.684 thousand.147) (202. 12.665) (499) 7.419) (4.484. which is further adjusted by tax allowances and relevant credits.522 994. 12. (j) Financial Leasing Assets acquired under financial leases are recorded in “Tangible fixed assets” when the legal ownership is transferred to the Bank.743. A deferred tax asset is recognized only to the extent that there are no doubts that there will be future taxable profits available against which this asset can be utilized.211 2010 8.from deposits .415 6.102 GE Money Bank Consolidated Annual Report 2010 Notes to the Financial Statements of GE Money Bank.

312 Total adjustments.549 9.272.350.357 7. the Bank provided a collateralized loan to an affiliate entity.258 0 37.385 9.554.398 21. for which it obtained a guarantee from the ultimate parent company of CZK 11. 12.561 0 0 134.212) 76.517 80.748 In 2010.595.353.246) 17. a.398 (4.904) 74.920 7.400.274 CZK 000 Personal guarantee Financial institutions CZK 000 Standard Watch Sub-standard Doubtful Loss Adjustment to potential losses 31.982.212) 76.861 (371.696 96.625.164) 3. 2010 88.192.522.657 (426.144 17.2010: CZK 7.596.363.012 1.195.370 (284.657 0 0 36.537.975. (c) Analysis of Receivables from Customers by Sector and Type of Security Received As at 31.806 0 0 3.830 38.485.769).484.1.083 Unsecured 8.608 103.980 (2.920 7.796 (54.733 Bill of exchange 0 1.612 Mortgage 14.797 110.587.190 6.099 60.510 thousand).200 0 0 0 599 0 1.843. RECEIVABLES FROM BANKS (a) Classification of Receivables from Banks CZK 000 Standard Net receivables from banks 31.352 0 0 711.510.334 3.996 (12. 2010 17.907 116.636 0 374.288.190 (1.135.595 9.799 Bank guarantee 0 330.287 Unsecured 588.200.377 received does not reflect adjustments.795. 2010 15.698) 2.2010: CZK 482. 2010 8.162 (4.508 21.577) 3.273 The analysis of receivables by sector does not reflect b) Geographical Segments CZK 000 Czech Republic 2010 Interest income Interest expense Fee and commission income Fee and commission expense Gains or losses from financial operations 9. from receivables Net receivables from customers The analysis of receivables by sector and type of security 97.290 1.600.025 105.466) 1.861 Performance guarantee 0 108.171 European Union 2010 62.522 23.167 0 643.342 Performance guarantee 0 52.013 11.907 Financial institutions Non-financial institutions Government sector CZK 000 Personal guarantee 0 0 0 0 0 588 0 588 Bank guarantee 0 629. 1.1.286 44.671 thousand (1.670 1.251.920 3.216.348 15.345.174.441.926 2.907 116.365.266.719.663.362.296.s. The guarantee is reported in the off balance sheet in “Commitments and guarantees”.083 Bill of exchange 0 0 0 0 0 0 0 0 Held by the Bank 0 102.797 110.515 (419.296.600. the Bank created an adjustment of CZK 2.663.258 thousand (1.615 3.341) 15.192. 1.030 6.372 44.707.616) (8.132.097 thousand.265 44.362. INCOME AND EXPENSE ACCORDING TO SEGMENTS a) Business Segments CZK 000 Personal banking and finance 2010 Interest income Interest expense Fee and commission income Fee and commission expense Gains or losses from financial operations 7. 2010 14.019 89.468 68.748 17.657 (426. 2010 8.094 22.122 0 4. 105 12.794.335 15.104 GE Money Bank Consolidated Annual Report 2010 Notes to the Financial Statements of GE Money Bank.517 80.907 Total 14.357 15.576.142) 1.797 72.760 587.378 0 0 0 0 0 1.019 89.913 11.820 (1.365.378 Held by the Bank 0 75. RECEIVABLES FROM CUSTOMERS (b) Analysis of Receivables from Banks by Type of Security Received CZK 000 Security held by the Bank Guarantee from parent company Unsecured Total 11. the Bank held state zero-coupon bonds under resale commitments with a market value of CZK 2. 2010 2.166) 1.055 Non-financial institutions Government sector Non-profit organizations Entrepreneurs Resident individuals Non-resident individuals Total (13.653 7. 12.307 2.893 3.156.348.348 15.195 65.664.190 (1.376) 23.549 9. 1.025 105.562.707.896) 0 1. The remaining change in adjustments relates primarily to the additional portfolio transferred to the Bank as part of the legal restructuring (see Note 1a).485.1.451.532.495.299.431 3.468. 2010 90.372 Total 603.273 (a) Classification of Receivables from Customers In 2010.098.990.608 103.624.836) 53. RECEIVABLES FROM CUSTOMERS (CONTINUED) In 2010. 1.330 43.312 1.202 21.246.777.775 3. 12.772.330 1.081 42.428 0 9.186.174.772. which are reported in the off balance sheet in “Collaterals and pledges received”.847 28.722 thousand (1.441.352 0 844.990.707.473 9.315 3.055 15.432 23.260 0 0 82.164) 3.345.434 Corporate banking 2010 2.206 7.767 12. Non-profit organizations Entrepreneurs Resident individuals Non-resident individuals Total As at 1.354.663.508 21.371 0 0 8.817 1.300 0 6.736.206 7.341.796 (1. 12.049 thousand).783. During 2010 the Bank restructured receivables from customers totaling CZK 1. 2010 603. 1. 12.360 727.468 68.657 0 0 125.064 4.315 3.595.357 1.2010: CZK 7.772 2.965. .639.946 Mortgage 18.748 31.103. (b) Analysis of Receivables from Customers by Sector CZK 000 Financial institutions Non-financial institutions Government sector Non-profit organizations Entrepreneurs Resident individuals Non-residents Total 31.501 Total 8.072.398 21.261.382 Other 2010 30.354 9.546 58. 2010 13.

680 2. a.s.832.o. Debt recovery service 200 7.466.027. SHARES. 12.642 47.r. a.015 43. 2010 1. 1.100 12. Vyskočilova 1422/1a. 4.466. Prague 4.996.486 37. 2010 As at 1. 140 28 Prague 4.s.766 1.829 2. PARTICIPATION INTERESTS WITH SUBSTANTIAL AND CONTROLLING INFLUENCE (a) Participation Interests with Substantial Influence CZK 000 Registered Name As at 31.r.597 43.382 1. 2010 140 28 Prague 4 (leasing and loans) 0 *) Based on non-audited financial statements.092. 1719. DEBT SECURITIES ISSUED BY OTHER ENTITIES (a) Net Book Value of State Zero-Coupon Bonds and Other Securities Eligible for Refinancing with the ČNB 17.991 2010 (b) Classification of State Zero-Coupon Bonds and Other Securities Eligible for Refinancing with the ČNB into Individual Portfolios based on the Bank’s Intention Credit Bureau.597 31. 12. 2010 CZK 000 Registered office Business activity Other Registered categories capital* of equity* Share in equity Share of voting rights Book value (c) Net Book Value of Bonds issued by Other Institutions CZK 000 Eurobonds available for sale Net book value 31. 12.2010 Inkasní Vyskočilova 1422/1a. 4.o. 1. 2010 105.o.864 105.092.787.12.442 4. 2010 office Business activity Other Registered categories capital of equity Share in equity Share of voting rights Book value CZK 000 Czech Republic Slovakia Other Total 31.r.p.458 CBCB – Czech Banking Credit Bureau.200 3. SW. 207/84.o. 2010 At 31.o AgroConsult Bohemia s. Units and Other Investments Available for Sale As at 1.312 1. 140 28 Prague 4.015 47. Units and Other Investments into Individual Portfolios based on the Bank’s Intention Inkasní a exekuční servis s.887 13.458 12. 1.233 29. 107 14.297.026 1. 1719.r.092. 12.236 33.443 6.015 5. CZK 000 31.843 17.966 2. 12. 1.296.273 CZK 000 State treasury bills State bonds Net book value 31. 2010 0 0 a exekuční servis s.o.349 751.616 200 18.s. 1. Debt recovery service 0 0 0% 0% 0 Rudolfovská tř. 2010 Market value Issued by financial institutions – Unlisted Issued by non-financial institutions – Listed elsewhere – Unlisted Total 4.349 1. STATE ZERO-COUPON BONDS AND OTHER SECURITIES ELIGIBLE FOR REFINANCING WITH THE CENTRAL BANK. units and other investments available for sale Net book value 47.o.149 238. (e) Net Receivables from Customers Written-off and Recovered CZK 000 Write-offs Non-financial institutions Entrepreneurs Resident individuals Total Recoveries Non-financial institutions Entrepreneurs Resident individuals Total 1. 12. 1. 2010 110. 2010 CBCB – Czech Banking Prague 4. Rudolfovská tř.p. RECEIVABLES FROM CUSTOMERS (CONTINUED) (d) Analysis of Receivables from Customers by Geographical Areas 15. 12.r.667 11.308 20% 20% 240 As at 1. s.148. 207/84. 2010 1.106 GE Money Bank Consolidated Annual Report 2010 Notes to the Financial Statements of GE Money Bank.225 11. s. 2010 As at 31.224 31. HW and network 1. 12.470. 2010 7.755. HW and network 1. č.o AgroConsult Bohemia s.667 12. Na Vítězné pláni č.466.065. (b) Analysis of Shares. 2010 751. 2010 Market value .036 100% 100% 32. a.222 110.949 622 43.218 6. Na Vítězné pláni č. UNITS AND OTHER INVESTMENTS (f) Receivables from Persons with a Special Relationship with the Bank Board of CZK 000 At 1.553. 2010 8.286.358 3.772.128 140 28 Prague 4 (leasing and loans) 16. Technical advisory 370 01 České Budějovice in agriculture and woodcraft industry GE Money Auto. SW. 1. 1.189 100% 100% 6. (b) Participation Interests with Controlling Influence CZK 000 State zero-coupon bonds and other securities available-for-sale Net book value 11.597 28.872 10. Car financing 0 0 0% 0% 0 The loans mentioned above were provided under standard employee conditions. Technical advisory 370 01 České Budějovice in agriculture and woodcraft industry 0 0 0% 0% 0 GE Money Auto.458 Name As at 31. Vyskočilova 1422/1a. 12.200 3. PSC 140 00 Service databank.427.968 (a) Classification of Shares. 1.194 100% 100% 13. č.890 0 Supervisory Board 23 0 CZK 000 Shares.r. PSC 140 00 Service databank. Car financing 4. Vyskočilova 1422/1a. 2010 6.667 1.165 20% 20% 240 The analysis of receivables by geographical areas does not reflect adjustments. 1. 2010 Directors 0 0 Executives 5.

906 75.226 1.227. DUE TO BANKS Analysis by Residual Maturity CZK 000 Repayable on demand Up to 3 months Total 31.007.482) 68 0 (4.400. DUE TO CUSTOMERS (a) Analysis by Sector 19.243. 2010 Low value Furniture Land and CZK 000 As at 1.132 962 (3.483 CZK 000 Repayable on demand Savings with notice Term deposits with fixed maturity Other Total Buildings 667.595 0 25 0 0 231.2010 Amortization and Adjustments As at 1 January 2010 Charge for the period Additions due to legal restructuring Disposals As at 31.089) 93.628) 2.271 (1.489 (1.226 (90.687) 2.180.909.425. 1.045 0 0 0 2.320) (959.892. 12.379 Equipment 1.942.444 Savings with notice Term deposits with fixed maturity Other Total (a) Movements in Tangible Fixed Assets (b) Tangible Fixed Assets held under Finance Leases The Bank is not committed to any payments under finance leases for fixed assets in 2010.039.990 (1.507.932 1.045 142.682 Financial institutions Non-financial institutions Insurance institutions Government sector Non-profit organizations Entrepreneurs Resident individuals Non-residents Total 1.551 1.114 64. 2010 Net book value As at 31.621 302.108 GE Money Bank Consolidated Annual Report 2010 Notes to the Financial Statements of GE Money Bank.421) 21.431.560) (210.006.436 7.723 108.102.278.389 Other Fixed assets not yet in use 11.641.255.045) 0 0 0 (2.404 68 14.834.640 77.285.828 962.393 98.579) 74.556 Adjustments – valuation difference 0 0 Total 2.020 64.674 1.740 1.438. 1.953 (3.353. Total .196) 3.007 (2.867) 3.828 32.016. 2010 Additions Additions due to legal restructuring Disposals As at 31.497 (2.563 16.791.548 7.140. 12. 2010 796.645 tangible fixed assets 1.s. 2010 370.152 (381.610) 2. 2010 356.271 (50.262 0 0 0 0 0 0 989.321 431.215.030 1.742 0 2.879 168.289 (62.518) (319.571 Establishment costs Assets not yet in use Total 20.196 41 31.921 3.836 10. 2010 Amortization and Adjustments As at 1.713 and Fittings 64.581 83.586 242.748 299.677 562.569.612.076. 2010 290.711 74.734 250.796 694.965 (4.994 (671) 344.293 653.289 (65.614.476.437.428. 12. 1. 2010 131.458 0 0 0 0 0 0 758.785 4. 12.418 993.897.583 22.824 130.753 4.502) 2.521) At 1.579.682 1.630 (91.12.954 14.192.934 (101.421) 0 (65.854) (351.719 7.423 762.370) (30. OTHER ASSETS CZK 000 Other debtors Other cash values Receivable to state bodies Clearing account for payments Other Positive fair value of derivatives Accruals Deferred tax assets Less: Adjustments Total 1.949 2.550 0 Land and buildings not yet in use 4.496 2.195 2.161 2. 12.263 21. 2010 Additions Additions due to legal restructuring Disposals As at 31.538 345.083.497 (2.459 0 344.164 70.634 526.066. 1.394 3.841 1.974.854) (351.114 529.543.734 6.101.133.178) (281.576) (45.411.150) 774.139 70.926.566 138.400 84.030.916 5. 22.281 296.309.878) 88.182 676. 12.510 (32.665 15.037) (2.336 0 130 0 0 265.297. 1.036 16.796) (58.020 131. 2010 Financial institutions Non-financial institutions Insurance institutions Government sector Non-profit organizations Entrepreneurs Resident individuals Non-residents 1.568) (5.581 1.2010 Charge for the period Additions due to legal restructuring Disposals As at 31.186) 0 0 0 0 0 0 0 0 0 0 0 3.385.717 435.103 24.801 432 10.027) (198) 3.749 44.270 4.398.270) 14.461.590 0 (1.909 512.620 658.712 19.652 (1.766 21.884 109.786 251.513.990) 65. a.592 14.947 (110.036 19.276.217 313.271 30.206.688 80 3. 109 18.030 2.763 3. 2010 198.105 32.245.254 The item “Other cash values” includes cash in transit.262 70.920 35.699 52. 2010 Net book value As at 31.082) 2.681) 1.013) 1.328 58.282 7. TANGIBLE FIXED ASSETS CZK 000 Repayable on demand At 31.464 237.896.737 545.959 (3. 12.752.726 37. INTANGIBLE FIXED ASSETS (a) Movements in Intangible Fixed Assets CZK 000 Software and other intangible fixed assets Cost As at 1.045) 0 0 0 0 0 (1.604 302.251.615 605.102) 0 0 0 0 0 0 0 3. 1.290 94.344 622 1.502) 2.608) 751.507.375 0 1.717 1.223) (281.196) (150.426. 12.711 173 (7.556 29.524 1.571 4.

2010 Increase in adjustment due 25. PROVISIONS AND ADJUSTMENTS FOR POSSIBLE CREDIT LOSSES (CONTINUED) (b) Provisions for Litigations CZK 000 Balance as at 1. USA 510 100 (775. 12. The increase in the clearing technical account balance as at 31 December 2010 reflects the changes in the Bank’s internal process of clearing with the Czech National Bank. 2010 Total adjustments for credit losses as at 31.941) Balance of other adjustments as at 31. 12.783 46. 12.139 41.821 477.746 17. The increase in registered capital was recorded in the Commercial Register on 25 March 2003. 1.210 90.399 3. 2010 Creation during the current year Use during the current year Release of provisions no longer considered necessary Balance of provisions as at 31.421 Supervisory Board 4. The balance as at 31 December 2010 in the amount of CZK 422 million will be used to complete the settlement. 12. 1.261 0 (13.176) (1.573.972 Executives 18. DUE TO CUSTOMERS (CONTINUED) (b) Due to Persons with a Special Relationship with the Bank Board of CZK 000 As at 1.655 2.000.017) 1.036. 111 22.316 (417.s.367. v likvidaci case.968 0 8. REGISTERED CAPITAL In order to establish the Bank.12.218 648. 1.936.000 million for such shares. 2010 Additions Disposals As at 31. 2010 (0) . Each share was issued at a premium of CZK 1.248 5.073.644) no longer considered necessary Balance of tax deductible (0) adjustments as at 31.750 thousand and was paid in full.367 330. Delaware. 2010 620.931 (291.177 No person with a special relationship to the Bank held any shares of the Bank as at 31 December 2010.078) (275.510. a. Balance of tax non-deductible adjustments as at 31.165 (1. The shareholders of the Bank as at 31 December 2010 include: 25.000 per share and paid CZK 2.989 Release of adjustments no longer considered necessary (32.628 The item “Other” includes mainly CZK 327 million obtained from GE Capital International Holdings Corporation this amount to increase the Bank’s registered capital.429 328. 2010 Creation during the current year Use during the current year Release of provisions 1. OTHER LIABILITIES CZK 000 Trade payables Payables from deposit insurance Payables to state bodies Payables from social and health insurance Accruals Negative fair value of derivatives Clearing technical account Other Total 337. a.285 636. 12.000.s.616 8. 12.907 2. 1.728. 2010 101.2010 31. In 2010 the Bank did not issue any ordinary shares. 1.389) Included in the total provisions is a provision of CZK 800 million created in 2007 for an anticipated settlement in the Agrobanka Praha.074.592. As of 25 March 2003 the registered capital of GEMB was CZK 510 million.023 (197) 2.000 63.217.382 1.055) 4. 2010 820.524) (16.446) (c) Due to Participation Interest with Substantial Influence Name Seat Number Ownership % Wilmington. (d) Adjustments to Operational Receivables CZK 000 31.689 1. 2010 589.252 0 31.142 31.687 (c) Adjustments to Customer Receivables Balance as at 1. 2010 CZK 000 Tax deductible adjustments for credit losses Balance as at 1. part of this provision was used to satisfy the conditions of the settlement concluded in 2010 (refer to Note 32). GE Capital International Holdings Corporation 23.2010 91. 2010 Creation during the current year Use during the current year Release of provisions no longer considered necessary (1. 2010 0 466.511 17.110 GE Money Bank Consolidated Annual Report 2010 Notes to the Financial Statements of GE Money Bank.117) (65.970.682.865 (continued next column) 4.140.751 The Bank had no amounts due to participation interest with substantial influence as at 31 December 2010.158 51.12.614 38.307 0 0 26.450 2. RETAINED EARNINGS. Balance of tax non-deductible provisions as at 31. 1. 2010 4. 2010 to legal restructuring Creation during the current year Use during the current year 4.433.036.000 Profit Retained earnings Statutory reserve fund (4. 12. In the current period.217.329 334.891. 1. 2010 Increase in adjustment due to legal restructuring Creation during the current year Use during the current year Write-off of loans and advances Cover of losses from loans sold Release of adjustments (1.511 3. 2010 13. 1. 12.884 2. 2010 before allocation of 2010 profit Profit for 2010 Proposed allocation of 2010 profit: Transfer to retained earnings (3. GE Capital International Holdings Corporation intends to use no longer considered necessary Balance of tax deductible provisions as at 31. 2010 Increase in adjustment due to legal restructuring FX rate differences Creation during the current year Use during the current year Write-off of loans and advances Cover of losses from loans sold Release of adjustments no longer considered necessary 31.644 0 0 31.681.840) 4. GE Capital International Holdings Corporation subscribed 500 shares of original capital with the nominal value of CZK 1.000 each. 12.367 In 1998 the Bank issued 10 ordinary shares with the nominal value of CZK 1. 12. 12. PROVISIONS AND ADJUSTMENTS FOR POSSIBLE CREDIT LOSSES (a) Provisions for Guarantee Losses CZK 000 Tax deductible provisions for guarantee losses Balance as at 1.724 0 8.174) CZK 000 Tax non-deductible adjustments for credit losses Balance as at 1.511) 3.611 (399) 4.307) 24. 1209 Orange Street.217.804 102. 12.12. RESERVE FUNDS AND OTHER FUNDS ALLOCATED FROM PROFIT The Bank proposes to allocate the 2010 profit as follows: CZK 000 Balance at 31. 2010 Tax non-deductible provisions for guarantee losses Balance as at 1.2010 Directors 3.

040 0 7.410 (816.063.701) 1.040 (315.030 3.126 10.394.009. Other Written Contingent Liabilities and Assets Pledged as Collateral CZK 000 Customers Notes acceptances and endorsements Payables resulting from guarantees 8.000 96.2010: CZK (368.098) thousand (1.000 Relationship with the Bank with a special relationship to the Bank as at 31 December 2010.227. 1.527 thousand) and liabilities from fixed term transactions in the amount of CZK 12.394.348 10.500 96.845) 0 0 0 1.000) (7.000 946.795) 0 137.098) (368.675 10.656 63. 12.111 (215.1.824 Hedging instruments Interest rate swap contracts Trading instruments 0 8.000) thousand) corresponds to the difference of receivables from fixed term transactions of CZK 2.115 (1.701) thousand) corresponds to the difference of receivables from fixed term transactions in the amount of CZK 11. a.776) 0 0 0 700. 1.079) 25 The total net fair value of hedging instruments in the amount Total net fair value of trading instruments of CZK (20. The change in the deferred tax asset of CZK 187. 1. Letters of credit and financial guarantees Total 656.566.640) 1.479) (633. OFF-BALANCE SHEET (a) Irrevocable Contingent Liabilities arising from Acceptances and Endorsements. 2010 732.630 7.181.025) (106.840.634.640.040 Forward foreign exchange purchase contracts Forward foreign exchange sale contracts Interest rate swap contracts 96.801 (96.010.640.303) 0 152.2010: CZK 10.934.1.857 Forward foreign exchange purchase contracts Forward foreign exchange sale contracts Interest rate swap contracts At 1. All the above transactions were concluded on the interbank market (over-the-counter).458 17. The deferred tax liability from revaluing available for sale financial assets of CZK 14.009.696 thousand) and liabilities from fixed term transactions in the amount of CZK 2.471.634. 2010 of CZK (315.367 thousand (1.838.096 1. i.479 (c) Income Tax Expense CZK 000 Deferred income tax Income tax due Income tax expense 2010 376.098) (315.386) (140. OFF-BALANCE SHEET (CONTINUED) (d) Off-balance Sheet Financial Instruments CZK 000 Contractual amounts 31. 2010 1.923) (20.630 (b) Guarantees Issued in Favour of Persons with a Special Deferred income tax assets and liabilities are attributable to the following items: The Bank did not issue any guarantees in favour of persons CZK 000 Deferred tax assets Credit provisions Valuation difference on acquired assets Other reserves Deferred tax liability Penalty interests Tangible and intangible fixed assets Revaluation of available for sale financial assets Other reserves Net deferred tax asset/(liability) (14.423) 5.000 0 0 9.732.355 7.630 11.1. 19% for 2010 onwards.932 501. 2010 Fair value 31.601.000 (78.459.696 thousand).703.427 (953.575.934 (57.899) (2.930) (2.218 1.032 (2. 2010 Up to 3 months 3 months to 1 year 1 year to 5 years Total (b) Deferred Tax Liability/Asset Deferred income taxes are calculated on all temporary differences using the tax rate in the year of the expected reversal of the timing difference.e.394.422.880.040 7.112 GE Money Bank Consolidated Annual Report 2010 Notes to the Financial Statements of GE Money Bank. 0 7.440) 653. 1. 2010 28. (c) Guarantees Issued in Favour of Participation Interests with Substantial Influence The Bank did not issue any guarantees in favour of participation interests with substantial influence as at 31 December 2010.809 80.547) thousand (1.318 thousand (1.899 thousand is recognized in the equity. 12. (e) Residual Maturity of Financial Derivatives CZK 000 At 31.1.351.861 0 12. 12.1.601.801 (96.556 16. 12. 1.875 thousand results from the change in the balance of the net deferred tax asset calculated as at 31 December 2010.776) 10.360 thousand relates primarily to the additional portfolio transferred to the Bank as part of the legal restructuring (see Note 1a).219) (43.865 thousand (1.851. 2010 Decrease Increase Balance at 31.600) 31. INCOME TAX AND DEFERRED TAX ASSET / LIABILITY (a) Current Income Tax CZK 000 Current year profit before tax Income not liable to tax Tax non-deductible expenses Items increasing the tax base Items decreasing the tax base Subtotal Income tax calculated using a tax rate of 19% Tax discount and offsets used Own tax base Tax calculated using a tax rate of 15% Current income tax Additional income tax relating to previous years Current income tax 2010 3. 2010 1.261 1.601.016 1.009.443.2010: CZK 7.682) 2.1.018.875 (1.394. VALUATION DIFFERENCES CZK 000 Balance at 1.017 (136.2010: CZK (106. 12.427 (953.640) 1. 12.500 .468) (20. 2010 Hedging instruments Interest rate swap contracts Trading instruments 809.2010: CZK 7.313.465 thousand (1.345.2010: CZK 10. 1.546.604) Trading instruments Forward foreign exchange contracts Forward purchase Forward sale Interest rate swap contracts Total 946.547) (106. 29.857 580. 29.953) 11.640.630 (11.701) (368.776) 10. 2010 Hedging instruments Interest rate swap contracts Total 11. 2010 Available for sale securities 50.801 (96.545 (285) 5 1 1. 113 27.s.010.228 thousand).593 31.600 11.397 1. 2010 1.500 (13.517 The deferred tax benefit of CZK 376.965) 1.

• In the case of operations on money markets requires its counterparties to have at least an A-1 (Standard & Poor’s) / P-1 (Moody’s) rating.) Enterprise Risk Management (continued) The ERM Department performs. The committees carry out in particular the following: • Monitoring of the development of relevant risks. the Bank evaluates potential effects of changes in political.) Risk Division The Risk Division is responsible for risk management. receivables meeting at least 1 of the following conditions are also included in this category: • The Bank does not have sufficient information on the debtor's financial situation more than 30 days after the date when this information was to be provided to the Bank. Internal Audit. Risk management covers control of risks associated with all business activities in the environment in which the Bank operates and ensures that the risks taken are in compliance with the prudential limits. 123/2007 Coll. CREDIT AND OPERATIONAL RISK Risk Management The aim of the Bank is to achieve within its business activities competitive yields at an acceptable risk level. (A. • Coordinates the effort to maintain a stable asset and liability structure and the value of capital. or commodities for the purpose of achieving speculative profits. • Approval of the principles of risk management as well as the basic methods. and • Minimizes potential losses from operational risk via economically efficient remedial measures. the Risk Division: CRO 30. it is likely to be repaid in full. approval of remedial measures in the case of exceeded limits or unfavorable development trends. Market Risk. operational. The members of these committees include members of the Board of Directors and other senior managers of the Bank. In this respect. CREDIT AND OPERATIONAL RISK (CONTINUED) (A.s. When managing risks. and • Prepares risk reports for the ALCO. • Develops and maintains the methodology of operational risk management. monitoring and measurement. but none of them are more than 90 days past due.114 GE Money Bank Consolidated Annual Report 2010 Notes to the Financial Statements of GE Money Bank. currencies. The Bank has sufficient information about the debtor's financial situation and the current value of the debtor's internal rating is better than 8. the Bank relies on the qualifications and experience of its employees.) Risk Management Organizational Structure (continued) (A. The CRO is a member of the Board of Directors of the Bank. Liquidity.) Categorization of Receivables • Coordinates all activities of credit.c. • Uses financial derivatives exclusively for risk management purposes. • Does not trade in equity or debt securities.) Level of Risks Accepted The Bank’s business activities are primarily directed at providing deposit. The Bank’s strategy is to avoid all risks that are not associated with its main line of business and to minimize all other risks. economic. 115 30. and • Monitoring of the adequacy. (B.) Credit Risk Credit risk is the risk of a loss for the Bank resulting from the failure of a counterparty to meet its obligations arising from the terms and conditions of the contract under which the Bank became the creditor of the counterparty. implementation and validation of models. None of the receivables towards the debtor have been restructured in the last 6 months owing to a deterioration in the debtor’s financial situation. processes and limits. The Bank includes in this category receivables where the principal or accessions are being paid with some problems. (C. The level of risk is measured in terms of its impact on the value of assets and/or capital and the profitability of the Bank. CRCO and GCC. implementation and maintenance of reserve and capital allocation models. non-approved current account debits. and the Governance & Control Committee (GCC) . and liquidity risk management with the aim to ensure GEMB risks are managed reliably and efficiently. market. and the use of sophisticated analytical instruments and technologies.b. FINANCIAL INSTRUMENTS – MARKET. This combination of a prudent approach. • Monitors fraudulent operations and is involved in the prevention and investigation of fraud. development or selection. the organizational segregation of duties. • Administers the data infrastructure and analytical systems supporting risk management. CMMC was established by the GEMB Chief Risk Officer (CRO) and its members are experienced managers of the Risk Division and the Commercial Banking Division. scenario assumptions and any other parameters used in the process of risk management. of 15 May 2007. • Carries out operations on the money market exclusively for liquidity management purposes. None of the receivables from the debtor have been restructured in the last 2 years due to the deterioration in the debtor’s financial situation. reliability and efficiency of risk management’s internal regulations. measures and reports credit. mortgages and automatically approved commercial loans. In addition. The Credit Monitoring and Management Committee (CMMC) monitors and manages credit risk of the commercial credit portfolio. Capital Allocation) Governance & Control Committee (Corporate Govemance. • Ensures the development. analytical skills and technologies. with none of them being more than 30 days past due. limits.) Enterprise Risk Management The Enterprise Risk Management Department (ERM) is a part of the Risk Division. and • Ensures the collection of receivables from individually approved commercial loans. (A. Among other things. • Monitors. and interbank deals.c. • Ensures credit approvals. The ERM Department is responsible for the key parts of credit. and liquidity risk management. operational.) Risk Management Committees The Bank has three main risk management committees: the Asset & Liability Committee (ALCO) for assets and liabilities management. (A. natural persons acting as entrepreneurs. market. a. and regular reviews and back testing). and small and medium-sized enterprises. support the Bank’s success and the stability of its economic results.) Risk Management Organizational Structure CEO Supervisory Board (portfolio monitoring) for the management and control system and operational risk management. including the observance of limits. The Bank: PMT Consumer Risk Board of Directors Commercial Risk Enterprise Risk Management Credit Committee (Credit Risk) Asset & Liability Committee (Asset & Liability. The categorization is as follows: Receivables Without Debtor Default The Bank assigns receivables without debtor default to the following sub-categories: a) Standard Receivables A receivable is regarded as “standard” if there is no reason to doubt that it will be repaid in full. The Bank includes in this category receivables where the principal and accessions are being duly paid. credit unions and investment firms. the head of the ERM Department is approved by the Bank’s Board of Directors. b) Watch Receivables A receivable is regarded as “watch” if. • Maintains and develops the methodology of calculating and allocating regulatory and economic capital. • Implements and maintains the processes and infrastructure for recording and analyzing operational risk data.a. in particular in the area of methodology. operational and liquidity risks and proposes remedial measures in the case of exceeded limits or unfavorable trends. the Credit Committee (CRCO) for credit risk management issues. Operational Risk) Credit Risk Market Risk Liquidity Risk Asset & Liability Capital Allocation Operational Risk (A. market risks and liquidity risk management and the internal capital adequacy assessment process. Compliance. market and operational conditions and changes of clients’ creditworthiness on its business. guarantees. given the debtor’s financial and economical situation. including the identification and classification models and key risk indicators. market. • Sets terms and conditions for granting credit. among other things. letters of credit. FINANCIAL INSTRUMENTS – MARKET. which stipulates prudential rules for banks. transaction and credit services for retail clients. the following tasks: (C. together with adherence to procedural measures. The Bank assigns receivables into individual categories in compliance with CNB Decree No. • Supervises all rating and scoring models and processes (including methodology development. The Bank is exposed to credit risk in particular in the case of credits.a.

except for retail overdraft loans. (hereinafter the “Decree”). Receivables meeting at least one of the following criteria are also considered substandard: • A debtor’s receivable has been restructured owing to a worsening financial situation within the last 6 months.) Credit Risk (continued) (C. where the probability of default (PD) and discounted recoveries are applied. 117 30. and • Movable assets (machinery. are calculated using the coefficient method defined in the Decree. FINANCIAL INSTRUMENTS – MARKET. and • Adjudication of bankruptcy or an authorization to discharge. including secured troubled debt restructuring.) Adjustment Calculation Adjustments are calculated according to Decree of the Czech National Bank No. applying coefficient and statistical methods. but with none of them more than 180 days past due. This change in the estimate had no material impact on the adjustments reported. exposures to natural persons. the Bank uses external expert appraisals or internal assessments made by the Collateral Management Department of the Risk Division. Coefficient Method: Adjustments to individually approved small and mediumsized enterprises’ loans. Within the frame of the approval process. but with none of them being more than 360 days past due. . The prediction power of this rating tool is reviewed annually and changes in the model.s. CREDIT AND OPERATIONAL RISK (CONTINUED) (C. its full repayment is highly unlikely. The Bank involves in this category receivables where the principal or accessions are being paid with problems. and • The debtor’s internal rating is 9.a. • The debtor had its consumer loan repayments deferred less than 12 months ago. • Financial situation of the debtor. while coefficients were applied to calculate adjustments for all products in the past. • Restructuring of the debt. and • Internal rating of the debtor is 8. mortgage loans and secured consolidations. c) Loss Receivables A receivable is regarded as “loss” if.e. The Bank assigns them to the following subcategories: a) Sub-standard Receivables A receivable is regarded as substandard if. • The debtor had repayments of a consumer loan deferred more than 12 months and less than 30 months ago. if any. natural persons acting as entrepreneurs. The Bank considers the following types of collateral to be acceptable to decrease the gross credit exposure for the purpose of calculating the adjustment: • Cash. which are approved by the CRCO.) Categorization of Receivables (continued) • The debtor had repayments of a mortgage loan deferred more than 18 months and less than 3 years ago. CREDIT AND OPERATIONAL RISK (CONTINUED) (C. The rating model assigns clients that are not in default to 9 rating classes (rated 0 to 8). A receivable is also considered doubtful if a competent court has issued a decision on settling the debtor’s bankruptcy via a discharge from debts or reorganization. given the debtor’s financial and economical situation. are approved by the CRCO. A receivable from a debtor who is subject to bankruptcy or settlement proceedings is also considered to be a loss receivable. product and collateral.) Commercial Banking (SME Credits) (C. reorganize.b. its full repayment is impossible. The Bank includes in this category receivables where the principal or accessions are being paid with problems.) Credit Risk Management The field of credit risk management is divided into two main domains. to which credits are provided on an individual basis. The average contractual interest rate for a particular product line is used as the discount rate. but a number of the processes and methods used fall within the category of commercial exposures. • The debtor had its mortgage loan repayments deferred less than 18 months ago. equipment. Clients in default constitute the tenth rating class. 123/2007 Coll. The expectation is that such receivable will not be repaid or will only be repaid in part in a very small amount. a department operating independently of the Bank’s business units. as well as the maturity.e. Credit risk management in the mortgage business has a specific position as mortgages form part of the retail exposures. Coefficients are applied to the gross book value of an individual receivable reduced by the realizable value of collateral as follows: • Watch 1% • Sub-standard 20% • Doubtful 50% • Loss 100% exposures to small and medium-sized enterprises (SME).) Collateral Assessment The Bank requires collateral covering credit receivables either by means of an individual assessment of the obligor or as a standard part of the given credit product.) Credit Risk (continued) (C. (C.) Internal Rating The Bank uses an internal statistical model to estimate the probability that its commercial clients will default. Receivables With Debtors Default Receivables with debtor default are considered nonperforming receivables.e. (C. (C.2. • Reliable receivables. • Guarantee of a reliable third party. Apart from some selected products permitting the granting of credits by 2 commercial bankers from the Commercial Banking Division. Statistical models for standard receivables are based on the incurred but not recognized loss principle.c. • Real estate properties. To determine the realizable value of collateral. Commercial exposures cover credit risk associated with Statistical methods have been used for un-secured products since 2010. The categorization in 2010 was carried out on a daily basis and the evaluation concerns in particular the following: • Debt service performance. The SME credit approval process is based on individual evaluation and each exposure has to be approved by two persons with appropriate approval authorities. a. given the debtor’s financial and economical situation. FINANCIAL INSTRUMENTS – MARKET. Coverage levels (ratio of the statistical estimate of losses to the portfolio) derived from models for a given product are applied to the gross book value of the individual receivables. and small and medium-sized enterprises (SME) that are granted credits on the basis of an automated approval process (based on scoring models). The Bank has its own rules and methodology for the collateral assessment and regularly reviews the values of correction coefficients.116 GE Money Bank Consolidated Annual Report 2010 Notes to the Financial Statements of GE Money Bank. Retail exposures include credit risk associated with (C. b) Doubtful Receivables A receivable is regarded as “doubtful” if. given the debtor’s financial and economical situation. all other credits have to be approved by an authorized employee of the Commercial Banking Division and by an authorized employee of the Risk Division. the Bank analyzes in particular the financial situation of the debtor and the persons economically related to the debtor. the debtor’s internal rating. although its partial settlement is possible and likely. • Bank guarantees. The ultimate realizable value of collateral is then set by applying the correction coefficient reflecting the Bank’s ability to realize the collateral in case of need. Statistical models for watch receivables and receivables with debtor’s default are based on discounted lifetime recoveries capped at 48 months. breeding stock). or settle the debtor’s property. although its partial settlement is highly likely. 30. as well as evaluates collateral and uses external data sources including credit registers.) Approval Process Statistical Method: Adjustments for products where the coefficient method is not applied (un-secured products) are based on statistical models developed according to the Decree. and exposures to banks and institutions.d. if any. • Securities. its full repayment is uncertain. The PD is scaled to a loss identification period of 6 months. The Bank involves in this category receivables where the principal or accessions are more than 360 days past due. Approval authorities are set on an individual basis and are determined by combining the level of exposure. • Meeting of the obligation regarding information with respect to the Bank.1.

CREDIT AND OPERATIONAL RISK (CONTINUED) (C.e.) Monitoring The Risk Division regularly monitors individual retail portfolios.) Credit Risk (continued) (C.3.) Financial Market Operation Exposures The main tool for measuring the credit risk of countries and counterparties (institutions) with respect to transactions in financial markets is the rating of international rating beginning of the period. the CRCO also deals with individual credit exposures. The model works with 1-month time bands up to the 10 year period and a time band exceeding 10 years. Given the different nature of individual products. the gradual pattern of repayment of receivables is reflected in the model. All behavioral assumptions are approved regularly by the ALCO. The Bank uses external agencies and/or sales of receivables in the collection process as well. sector. The model is based on the inclusion of interestsensitive assets and liabilities into relevant time bands. In order to ensure methodological and factual accuracy. This percentage is discounted by the average interest rate applicable to the given portfolio. (C.) Credit Risk Measurement Models The models reflect the historical performance of the portfolios by product line. the Bank uses a 1 year horizon for calculating VaR. CREDIT AND OPERATIONAL RISK (CONTINUED) (C. The Bank manages the risk of concentration through limits applicable to countries.f. • Models for Unsecured Revolving Loans (C. and Fitch. FINANCIAL INSTRUMENTS – MARKET. In the event of a significant change in the macroeconomic environment. agencies: Standard & Poor’s.) Credit Risk (continued) (C. document storage and the subsequent production of contract documentation. The average contractual rate is used to discount the expected payments on a product-byproduct basis. for which it requires a minimum short-term rating of A-1 / P-1 / F1.) Commercial Banking (SME Credits) (continued) The Bank has implemented its own IT solution supporting the process of SME credit approval and administration facilitating the preparation of credit applications. . an economically related group of persons. Repayments of receivables are monitored over the product life time of 48 months. If no solution is found within 60 days after the due date. b) Watch Receivables and Receivables with Debtor Default The percentage of receivables for each particular category that are not repaid in a given period are identified.) Credit Risk Capital Requirement The Bank uses the standardized approach (STA) in the credit risk capital requirement calculation. Its activities in the area of interest rate risk management are aimed at reducing the risk of losses. To measure interest rate risk. Approval strategies are set by the Risk Division. This department deals with debtors and discusses possible solutions. (D. the linking thereof with data warehouses.4. activity.) Monitoring All SME clients are monitored both individually and on the portfolio basis. The PD is scaled to the loss identification period set at 6 months. (C. 30. Other receivables are collected by the Collections unit of the Operations Division with the aim of achieving maximum recovery.5. The Bank prefers to use behavioral features of cash flows rather than those that are purely contractual. The outputs of the statistical models are reviewed annually using the data as at 30 September.g.) Risk of Concentration The risk of concentration means the risk arising from the concentration of exposures with respect to (one) person.f.e. Individual monitoring and any potential remedial measures are dealt with by the CMMC. The CRCO approves any update of the coverages. which also decides on categorization changes in cases when the change does not clearly follow from the categorization rules. the Bank also applies the historical method of calculating Value at Risk (VaR) for the investment portfolio at the confidence level of 99%.) Collection The Collections unit of the Operations Division is in charge of the initial phase of collection. region. the Remedial & Collection Department of the Risk Division administers receivables whose recoverability is endangered.f.h. ERM checks them and regularly monitors the predictive power of individual models. the Bank applies the following approaches to the coverage calculation: • Models for Unsecured Closed-End Loans and Troubled Debt Restructuring a) Standard Receivables The coverage coefficient for standard receivables is based on the gross coverage and the discounted recovery percentage. Interest rate risk is the risk of a loss arising from changes of interest rates on financial markets. The Bank sets individual limits for individual countries and institutions.2. Mortgages are approved individually by the Risk Division underwriters on the basis of individually set approval authorities. For car financing products approval process is automated and supplemented with individual assessment. The system enables access to financial analysis tools including internal ratings. including receivable restructuring.e. the review is performed more frequently. a. The Bank strives to minimize interest rate risk. Taking into account the stable structure of the investment portfolio with respect to the interest rate risk. (E. Risk Division underwriters may approve individual exposures that do not pass the automatic approval process.f. or commodity.118 GE Money Bank Consolidated Annual Report 2010 Notes to the Financial Statements of GE Money Bank.4.f. FINANCIAL INSTRUMENTS – MARKET.4. b) Watch Receivables and Receivables with Debtor Default The migration among delinquency categories over the period of 48 months is monitored.f. (C. For these loans.f.3. counterparties and economic sectors. which serves to determine the sensitivity of the Bank to changes in the market interest rates. the coverage calculated shows what part of the accounts is recovered during 48 months. internal scorings are used. Reports on the quality of the SME portfolio are discussed by the CRCO each month and if necessary or required by CRCO.) Approval Process The approval process in the retail exposures segment is (with the exception of mortgages) based on the use of internally developed scoring models and the access to external data sources (in particular credit registers). 119 30. and monthly reports on the quality of the retail portfolios are presented to the CRCO.) Retail Banking (C. The development of these scoring models and approval strategies is carried out by the PMT Department of the Risk Division. (C. To monitor and measure interest rate risk. The percentage of accounts that moved to the doubtful or loss categories during the period is calculated.s. interest rate sensitivity is used. The Bank is exposed to interest rate risk as interest bearing assets and liabilities have different maturity periods or interest rate change/adjustment periods. as well as different volumes in these periods.) Claiming of Debtors’ Receivables In order to achieve maximum recovery. and represents the Bank in creditors’ committees in the event a debtor declares bankruptcy.) Scoring Instruments When approving retail exposures. a model of (C.1. Moody’s. These statistical models classify individual clients into categories of homogeneous exposures using sociodemographic and behavioural data. The repayment percentage identified hereby is discounted using the average interest rate for the given portfolio and is applied as a coverage coefficient to the particular category of receivables.) Interest Rate Risk For loans whose full repayment was enforced at the (C. The probability of default (PD) is scaled to the loss identification period set at 6 months. takes relevant legal steps to realize collateral in order to collect receivables in legal proceedings or to sell receivables. (C. receivables from the automatically approved commercial credits and mortgages are transferred to the administration of the Remedial & Collection department of the Risk Division. (C.) Credit Risk Measurement Models (continued) a) Standard Receivables The coverage coefficient for standard receivables is based on the gross coverage and the discounted recovery percentage. The outcomes are regularly discussed by the CRCO.

258 0 0 9.704) 0 1. For the purpose of liquidity management under extraordinary circumstances.212 0 0 0 0 0 0 29. Assets and liabilities in foreign currencies. For other currencies.583 25.035.440.625 9.015 240 6.321 0 5.785 310.765 (20.790.936.744. and • Assessment of the impact of the liquidity management stress scenarios on the Bank’s liquidity position.597 240 0 4.680 0 0 244.357 97.024.622 33.047 658.499. Residual Maturity of the Bank’s Assets and Liabilities 3 months CZK 000 At 31.888 1.233.945.847 26.2010 Cash and deposits with central banks State debt securities Receivables from banks Receivables from customers Debt securities Shares.922.585 0 0 0 0 0 0 39. credits taken.622.486 4.046.649 110.917.589 0 95.298 15.858. as well as the Bank’s equity.712 16.801 0 43.866.714 34.001) 0 6.488 25.367) (73.758 0 19.044) 0 1.445.890 296.622 0 3.576.742.367) 0 3.092.346 0 0 0 0 2.486 11.946 0 32.595 State debt securities Receivables from banks Receivables from customers Debt securities Shares. • VaR (maximum expected loss per business day at the 99% confidence level) for the foreign currency portfolio. 2010 Cash and deposits with central banks 1.891. the Bank maintains a balance of assets and liabilities in foreign currencies and uses the following limits: • Ratio of the absolute value of the net currency position to capital for each foreign currency.366 1.600. CREDIT AND OPERATIONAL RISK (CONTINUED) (E.377 0 43.546. which are based on the analysis of historical data.695 26.178 0 47.614 0 0 0 0 8.832.713 0 102.057 262.841 5.429 0 8.121 0 0 140. • Ratio of highly liquid assets to the total deposit base. interest rate derivatives are used in most cases. The Bank has access to diversified sources of financing. and • Volume of assets intended to cover the stress scenario.424.945.103 3.899.850.400 0 27.750 29.050.666 (16. • Calculation of the expected outflow (99% quantile of the distribution of a one-day outflow of cash from GEMB in the given period). To diversify and stabilize liquidity sources and to deposit excess financial assets. 1.035.663.889.519.932 6.) Interest Rate Risk (continued) • Ratio of assets to liabilities for each foreign currency.165. and • Impact of stress test on capital (Tier 1 and Tier 2).389 134.470 0 0 0 0 0 0 34. if a net currency position of a currency exceeds a given limit. (F.370) 0 2.188.674 100. • Ratio of highly liquid assets to expected outflows.444 29.662 0 34. the money market and bond market is used.388.834.222. represent the Bank’s exposure to foreign exchange risk.542 24.996.) Liquidity Risk (continued) At 31.098 12. Average for CZK 000 2010 2010 At 1. on a daily basis. 12.449.750 0 0 5.943 990.017.569 0 0 0 0 1. The Bank also has a flexible credit line within the General Electric Group.522. The financing sources consist of savings and other deposits.001) (83.907 22.074.416 0 5. GEMB carries out stress testing based on the parallel shift of the yield curve by 200 basis points for all currencies that account for more than 5% of the Bank’s assets.028 26.345 10. For this purpose.997 (46.772 110. 12.078 658.362 0 0 Up to 3 months to 1 year 1 year to 5 years Over 5 years Without specification Total Simultaneously.465. The Bank strives to minimize foreign exchange risk.414 (73.488 134. • Ratio of the absolute value of the total currency position to capital. CREDIT AND OPERATIONAL RISK (CONTINUED) (G.888) 0 3.039.238.025 0 8. 2010 CZK 000 VaR of currency instruments 2010 48 (G.261. and applies a system of the following limits: • Liquidity positions in individual time buckets.968 4.651 0 4. To manage the liquidity risk for main currencies. 12.472. and forwards them to the ALCO for approval.078 0 0 .149.397 16.262.399 0 881. units and other investments Participation interests with substantial influence Participation interests with controlling influence Other assets Prepaid expenses and accrued income Total Due to banks Due to customers Other liabilities Accrued expenses and deferred income Total Gap Cumulative Gap 2.349 47.364.612 0 0 135. which. the Bank uses limits for the ratio of quickly liquid assets to liabilities.121 37.349 0 0 0 1. • Ratio of the absolute value of the net currency position in Czech Koruna to capital.935 20.254 (6.573 3. net currency positions and a VaR model based on historical data.120 GE Money Bank Consolidated Annual Report 2010 Notes to the Financial Statements of GE Money Bank. • Absolute value of the total currency position.119 0 30.362 296.) Foreign Exchange Risk Foreign exchange risk is the risk of a loss owing to changes in the market exchange rates of the individual foreign currencies in the Bank’s portfolio.735 2.188.832.731.051.723.691.191 0 0 0 0 0 0 37.254 108.704.992.594 25. 30.s.650.1.612 0 244.749 0 22. The daily measurement of liquidity risk in main currencies (share of the balance sheet total exceeding 5%) includes: • Calculation of the liquidity position based on the liquidity gap model. FINANCIAL INSTRUMENTS – MARKET.847 139.191 0 140. which measures net cash flows in set time bands.891 (83.620.107 751. including offbalance sheet exposures.887 7.752.670.366) 0 3.087.599 2. the Bank VaR of interest rate instruments 264.046.610.458 17.157.620.760 112.000 0 35. the Bank has a contingency plan containing measures for recovering liquidity.754. To measure foreign exchange risk.382. 2010 21 The ERM regularly reviews the contingency plan and liquidity management scenarios.509.591 8.) Liquidity Risk Liquidity risk is the risk of losing the ability to meet financial liabilities when due or losing the ability to finance assets. Other liabilities Accrued expenses and deferred income Total Gap Cumulative Gap At 1.674 109.859.707. 1.445.935 139.585.667 15.943.157.571 811.233.628.235. At 31.466.968 3. a.391.597 240 0 3.171 112.954.635. Average for 2010 52 At 1.942.015 240 6. units Participation interests with substantial influence Participation interests with controlling influence Other assets Prepaid expenses and accrued income Total Due to banks and credit institutions Due to customers Interest rate risk management uses the following limits: • Ratio of assets to liabilities in each time band.058. the Bank uses.389 5.748 96.684. FINANCIAL INSTRUMENTS – MARKET. In 2010 the 5% share of the Bank’s assets was exceeded only by the portfolio denominated in Czech Koruna.824.083.688.753 2.050.228 999.366 0 273.985.680 28.363.701.752.929 (22.254 94. together with the diversification of other sources of financing.696 751.973) 0 2.872 0 5. To manage the discrepancy between the interest sensitivity of assets and liabilities.070 20. 121 30.943 34.504 1. significantly increases the flexibility of source acquisition and reduces the dependency on partial sources.028 (57.

During the workshop. The ECAP model covers all regular risks that are identified as material for GEMB and for which GEMB decided to reserve capital. a. • Interest rate risk in the banking book. effects.) Operational Risk Management Within the scope of operational risk management. on the One-Year Horizon (continued) In addition. a. Risks covered by the ECAP model are: • Credit risk.) Liquidity Risk (continued) The increase in receivables from customers reported under the “Without specification” category was caused by the change in the applicable Czech National Bank reporting methodology (watch receivables and receivables with debtor default are excluded from the assigment of residual maturity) . or by adopting an action plan to reduce the potential impact. a workshop with the senior management team takes place at the end of each accounting period.s. or owing to external circumstances. 123 30. The Bank concluded a settlement agreement with the involved parties of the Agrobanka Praha. Stressed cases are based on stress scenarios that reflect a significant downgrade of risk factors that could occur approximately once in 25 years. Key risk indicators are monitored as well. and discussed at a separate workshop. from 22 June 1998 (see the Annual Report for 2009). • Transfer of the risk via outsourcing or insurance. The confidence level used in the ECAP model is set up to respect the General Electric Bank target rating AAA. which was developed in 2008 to assess its internal capital requirement. by creating a specific reserve. a. Events whose impact exceeded the limit (CZK 10 thousand) are the subject of the data collection. The capital outlook includes an outlook of the regulatory capital requirement. FINANCIAL INSTRUMENTS – MARKET. INTERNAL CAPITAL ADEQUACY (A. the ALCO decides. If the same principles were applied to the data as at 1 January 2010 the amount of CZK 6. The CRO approves models and their modifications. Currently. and indicators. including concentration risk.) Internal Capital Requirement on the One-Year Horizon Internal capital requirement represents the stock of capital.b. the settlement process has been progressing satisfactorily and initial settlement conditions have been satisfied.) Internal Capital Requirement 32. LITIGATION In the past. (H.) Three-Year Forward-Looking Capital Outlook In addition to internal capital requirement assessment. Calculations show that CAR would not drop below 10% (target capital adequacy ratio). and • Business risk: a risk that GEMB will miss its planned profit due to common volatility in business volumes. and • Avoidance of the risk by terminating risk-inducing activities. (H. and use of technologies. Stress scenarios are developed in cooperation with the senior management team 33. and applies the following methods: • Mitigation of the risk by means of process improvements. based on expert judgment. 31. In the following months. • A business continuity plan for critical situations and operations recovery.s. SUBSEQUENT EVENTS There have been no events subsequent to the balance sheet date that require an adjustment of or disclosure in the financial statements or notes thereto. which contested the validity of the agreement on the sale of a part of the enterprise of Agrobanka Praha. It also covers legal risk. the organizational structure. part of the provision created for this case was used (refer to Note 25). organization. the collection of data on loss events). The settlement process will continue in the next accounting period. measured by CAR (Capital Adequacy Ratio). The limit is approved by the GCC on the basis of the outcomes of the annual RCSA process (Risk Control Self Assessment). based on one base case and two stress scenarios the capital outlook shows that. .023.440 thousand would be added to the “Without specification” category. with the aim to ensure business activities at a backup workplace.) Operational Risk Operational risk is defined as the risk of a loss owing to the drawbacks or failure of internal processes. The operational risk measurement uses the LDC process (Loss Data Collection. including the risk of loss owing to the breach of or non-compliance with a legal or a regulatory standard or to endangerment to the Bank’s reputation. (H. INTERNAL CAPITAL ADEQUACY (CONTINUED) (A. introduction of limits and checks. and • IT disaster recovery plans (activity recovery plans) for key IT applications. once a year GEMB designates a 3-year capital outlook. • Operational risk. GEMB uses a model called “ECAP”. (B. which is needed to cover unexpected losses in the following 12 months on a chosen confidence level. Following satisfaction of the initial settlement conditions. To mitigate the operational risk. risk factors. even in the worst case scenario. including the withdrawal of the lawsuits. an outlook of the internal capital requirement and an outlook of capital sources. The basic limit for the operational risk management is the operational risk tolerance (represented as the expected loss caused by operational risk in the given year). the human factor or systems.) Calculation of Operational Risk Capital Requirement The Bank used the alternative standardized approach (ASA) to calculate the capital requirement for operational risk in 2010.122 GE Money Bank Consolidated Annual Report 2010 Notes to the Financial Statements of GE Money Bank. The ERM maintains the models following the Basel II methodology and notifies the GCC of changes.a. Individual organizational units have operational risk coordinators who provide employees with methodological support in the area of the operational risk management and who cooperate with the ERM in activities relating to operational risk. whether the identified risks will be covered by an additional stock of capital. After identifying any risks. risks are identified that may turn to become material in the following year. v likvidaci case on 1 July 2010. GEMB will have enough capital sources to cover both regulatory and internal capital requirements under both stressed cases. process changes. Currently.s. the Bank uses identification and classification models to identify and describe events. CREDIT AND OPERATIONAL RISK (CONTINUED) (G. the Bank produces and maintains: 31. three lawsuits against the Bank as a defendant were filed. which includes base case development expectations and at least one scenario of stressed development.

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