Annual Report 2019

Central Bank of the Republic of Armenia 22. Other liabilities in domestic currency In thousands of Armenian Drams Other liabilities in domestic currency Payables Demand deposits of employees Other liabilities Total other liabilities in domestic currency Notes to the 2019 consolidated financial statements 31 December 2019 31 December 2018 2,133,087 2,386,248 1,251,847 1,137,386 1,023,623 979,786 4,408,557 4,503,420 23. Due to the Government of the Republic of Armenia 31 December 2019 31 December 2018 In thousands of Armenian Drams Foreign currency liabilities Current accounts of the Government Total foreign currency liabilities Domestic currency liabilities Term deposits Current accounts of the Government Loans from the Government Total domestic currency liabilities Total due to the Government of the Republic of Armenia 1,248,593 5,822,025 1,248,593 5,822,025 285,000,475 41,045,292 135,487,725 49,117,388 321,865 326,045,767 327,294,360 184,926,978 190,749,003 Term deposits of the Government have maturity of less than one year and interest rate is ranging from 5.25% to 5.93% (31 December 2018: from 5.59% to 5.91%). Loans from the Government outstanding as at 31 December 2018 represent loans obtained by one of the Group's subsidiaries from the Government under the Mortgage Loan Market Refinancing Project based on the general agreement signed on 13 June 2009. Loan's nominal interest rate is 7% per annum with maturity date till June 2019. As at 31 December 2018 mortgage refinancing loans to banks and financial institutions with a gross value of AMD 580,842 thousand serve as collateral for loans from the Government. 24. Debt securities issued As at 31 December 2019 the subsidiary company of the Group had in issue coupon bonds with AMD 6,500,000 thousand par value and 3 years maturity (31 December 2018: coupon bonds with AMD 7,710,600 thousand par value and 3-5 years maturity). As at 31 December 2019 the average annual yield on these bonds is from 7.36% to 8.13% (31 December 2018: from 8.1% to 11.8%). The carrying value of the issued bonds as at 31 December 2019 is AMD 6,626,428 thousand (31 December 2018: AMD 7,838,688 thousand). As at 31 December 2018 term deposits denominated in domestic currency in the amount of AMD 30,000 thousand and term deposits denominated in foreign currency in the amount of AMD 1,451,250 thousand serve as collateral for debt securities issued. 25. Management of capital Capital of the Group comprises the residual value of the Group's assets after deduction of its liabilities. The size of the capital is established by the Law. In accordance with this Law the amount of issued capital of the Bank is AMD 100,000 thousand. The authorised capital of the Bank is the property of and belongs to the Republic of Armenia and may not be pledged, confiscated or otherwise alienated against the obligations of the Republic of Armenia. The Bank's objectives when managing capital are to maintain an appropriate level of capital to ensure economic independence of the Bank and ability to perform its functions. The Bank's management considers total capital under management to be equity as shown in the consolidated statement of financial position. Objectives and policies of managing components of the Bank's capital are defined by the respective internal regulations approved by the decisions of the Board of the Central Bank of the Republic of Armenia (the "Board"). Formation of funds and reserves of the Bank for covering financial risks associated with performance of its functions is carried out in accordance with the regulations approved by the Board and the Law. 35

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