According to the Article 14 of the Securities Market Act (‘the RS Official Gazette’ no: 92/ 06), Article 3 of the Rule book on conditions and procedure of securities issue (‘the RS Official Gazette’ no: 29/ 07) and the Decision of Municipal Assembly of Laktaši in regard with the first bonds issue by tender no: 01- 022- 156/ 07, date: 30 th November, 2007, the Municipality of Laktaši (herein after: ‘Municipality’ and ‘Issuer’) makes the following: PROSPECTUS OF THE FIRST BONDS ISSUE BY TENDER OF The Municipality of Laktaši Prospectus of the first bonds issue by tender of the Municipality of Laktasi consists of: 1. Information about the Municipality, 2. Information about the bonds of the first issue, 3. Information about business operation of the Municipality, 4. Information about place, method, deadline and time for registration and payment of bonds, 5. Statement on investment, 6. Information about a person in charge of the Municipality, 7. Information about the issue representative, 8. Statement of the people in charge of the Municipality. The Municipality accepts responsibility for the content of this Prospectus. All knowledge and data from this Prospectus make complete and true presentation of property and duties, financial standing of the Municipality and rights stated in bonds. Therefore there is not any fact that could affect the completeness and authenticity of this Prospectus according to the best knowledge of the Municipality. The Republic of Srpska Ministry of Finance made a Decision on agreeing with the Municipality of Laktasi to debit on the basis of bonds issue (no: 06. 04/ 400- 1077- 1/ 07, date: 9 th November, 2007.) with total nominal amount of 10, 000, 000, 00 KM according to the Development Strategy of the Municipality of Laktasi 2007- 2015 (no: 01- 022- 57/ 07, date: 23 rd April, 2007.) and according to the Decision of the Municipality of Laktasi on bonds issue by tender no: 01- 022- 156/ 07, date: 30 th November, 2007. According to the Article 14 of the Securities Market Act (‘the RS Official Gazette’ no: 92/ 06), this Prospectus was approved by the Republic of Srpska Securities Commission on 22 nd January, 2008. With this approval, the Commission confirmed that the Prospectus contained all data determined by the Securities Market Act (‘the RS Official Gazette no: 92/ 06’) and the Rule Book on Conditions and Procedure of the Republic of Srpska Securities Issue (‘the RS Official Gazette’ no: 27/ 07), therefore it can be announced. Bonds will be inserted into official market of Banja Luka Stock Exchange. No one is allowed to give data and statements in regard with offer and sale of bonds that are not stated in this Prospectus. 1
Transcript
According to the Article 14 of the Securities Market Act (‘the RS Official Gazette’ no: 92/ 06), Article 3 of the Rule book on conditions and procedure of securities issue (‘the RS Official Gazette’ no: 29/ 07) and the Decision of Municipal Assembly of Laktaši in regard with the first bonds issue by tender no: 01- 022- 156/ 07, date: 30th November, 2007, the Municipality of Laktaši (herein after: ‘Municipality’ and ‘Issuer’) makes the following:
PROSPECTUS OF THE FIRST BONDS ISSUE BY TENDER OF The Municipality of Laktaši
Prospectus of the first bonds issue by tender of the Municipality of Laktasi consists of: 1. Information about the Municipality, 2. Information about the bonds of the first issue, 3. Information about business operation of the Municipality, 4. Information about place, method, deadline and time for registration and
payment of bonds, 5. Statement on investment, 6. Information about a person in charge of the Municipality, 7. Information about the issue representative, 8. Statement of the people in charge of the Municipality.
The Municipality accepts responsibility for the content of this Prospectus. All knowledge and data from this Prospectus make complete and true presentation of property and duties, financial standing of the Municipality and rights stated in bonds. Therefore there is not any fact that could affect the completeness and authenticity of this Prospectus according to the best knowledge of the Municipality. The Republic of Srpska Ministry of Finance made a Decision on agreeing with the Municipality of Laktasi to debit on the basis of bonds issue (no: 06. 04/ 400- 1077- 1/ 07, date: 9th November, 2007.) with total nominal amount of 10, 000, 000, 00 KM according to the Development Strategy of the Municipality of Laktasi 2007- 2015 (no: 01- 022- 57/ 07, date: 23rd April, 2007.) and according to the Decision of the Municipality of Laktasi on bonds issue by tender no: 01- 022- 156/ 07, date: 30th November, 2007. According to the Article 14 of the Securities Market Act (‘the RS Official Gazette’ no: 92/ 06), this Prospectus was approved by the Republic of Srpska Securities Commission on 22nd January, 2008. With this approval, the Commission confirmed that the Prospectus contained all data determined by the Securities Market Act (‘the RS Official Gazette no: 92/ 06’) and the Rule Book on Conditions and Procedure of the Republic of Srpska Securities Issue (‘the RS Official Gazette’ no: 27/ 07), therefore it can be announced. Bonds will be inserted into official market of Banja Luka Stock Exchange. No one is allowed to give data and statements in regard with offer and sale of bonds that are not stated in this Prospectus.
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Publishing of this Prospectus as well as selling and buying of bonds do not imply that circumstances in regard with the Municipality have not been changed since the date of the publishing of this Prospectus. This Prospectus cannot be considered as reference for buying or offer for selling by the Municipality or for its own account. Each investor who is considering buying bonds of the Municipality of Laktaši will be directed to evaluate and judge financial standing of the Municipality of Laktaši and conditions of bonds issue including risks by itself. All annual information including data from financial reports are based on calendar years if it is not stated the other way. Initiation to ‘KM’ refers to convertible mark and ‘EUR’ refers to euro.
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CONTENTS
1. INFORMATION ON ISSUER 1.1. Name and head office of issuer 1.2. Name and register number of issuer in the Register of issuers at Securities Commission 1.3. Legal state of issuer
2. INFORMATION ON MUNICIPAL BOND OF THE FIRST ISSUE
2.1. Name of the body that made a decision on issue and decision- making date 2.2. Ordinal number of issue, type and class of Securities 2.3. Selling price and method of its establishment 2.4. Interest accounting 2.5. Payment of principal and interest 2.6. Delay in payment of interest 2.7. Delay in payment of bonds principal 2.8. Buy back 2.9. Rights stated in bonds and restrictions of those rights 2.10. Method of establishment of bonds price at secondary market 2.11. Method of payment of principal and interest
3. INFORMATION ON BUSINESS ACTIVITIES OF ISSUER
3.1. General information 3. 1. 1. Geographic position 3. 1. 2. History and development 3. 1. 3. Territorial organization and estimated number of residents 3.2. Economy of the Municipality 3.3. Sport, manifestations and culture 3.4. Local government and self- government 3.4.1. Municipal Assembly 3.4.2. The Head of the Municipality 3.4.3. Administrative department 3.5. Development strategy of the Municipality of Laktasi 3.5.1. Vision 3.5.2. From strategic aims to the projects 3.6. Capital investments of the Municipality of Laktasi 3.7. Budget of the Municipality of Laktaši
3.7.1. Legislative frame of the procedure for making and fulfillment of the budget of the municipalities in the Republic of Srpska
3.7.2. Financial reports 3.7.3. Analysis of budget accomplishment in 2004- 2006. 3.7.4.Implementation of budget for the first nine months in 2007.and evaluation of
implementation till the end of the year. 3.7.5. Budget for 2008. and projection of regular revenues for the next year
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3.7.6.Consolidated balance sheet and income sheet of the Municipality of Laktaši for 2004, 2005. and 2007.
3. 8. Information on debt of the Municipality of Laktaši 3. 8. 1. Legislative frame of debts of municipalities in the Republic of Srpska 3. 8. 2. Debt procedure of the Municipality of Laktaši through bonds issue 3. 8. 3. Amount of accrued interest and their participation in total interests on the day
of making a decision on issue and debt dated 31st December, 2007. 3. 8. 4. Debt state according to existing and proposed debts 3. 9. Pledges, mortgages and other restrictions to the issuer’s property 3. 10. Legal procedures
4. INFORMATION ON PLACE, METHOD, DEADLINE AND TIME OF REGISTRATION AND PAYMENT
4.1. List of places for registration and payment, name, head office and address of bank where suspense account was opened for depositing money as well as time of registration and payment
4.2. Deadline for registration and payment 4.3. Mark on kept right of issuer to abandon the tender 4.4. Method and deadlines for reimbursement on the occasion of abandoning of registration and payment or unsuccessful issue 4.5. Criterion for the issue success
5. STATEMENT ON INVESTME
5.1. Sports hall in Laktaši- the project that will be financed by bond issue 5.1.1. Description of the sports hall 5.1.2. Evaluated total value of investment and schedule for investment 5.1.3. Information on permanent state of project 5.2. Risks of investments in general 5.2.1. Political risk 5.2.2. Risk of tax revenues 5.2.3. Interest risk 5.2.4. Operative risk 5.2.5. Credit risk 5.2.6. The Republic of Srpska Securities Market 5.2.7. Force Majeure 6. INFORMATION ON THE PERSON IN CHARGE OF THE ISSUER 6.1. Name and surname, address, vocational education and curriculum vitae 7. INFORMATION ON ISSUE REPRESENTATIVE 7.1. Name and head office of the stock exchange broker 7.2. Name and surname, address of the director and members of the board of directors of issue representative 8. STATEMENT OF THE PERSON IN CHARGE OF THE ISSUER
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1. INFORMATION ON THE ISSUER
1. 1. Name and head office of the issuer Name of the issuer Municipality of Laktaši Head office and address 56 Karađorđeva Street Telephone +387 51 532 370 Fax + 387 51 532 108 e- mail [email protected]
web www.laktasi.net 1. 2. Sign and registration number of the issuer in the Register of issuers at Securities
Commission
The Municipality of Laktaši was registered in the Register of issuers at Securities Commission on 9th November, 2007. under the sign and register number: 03- 1- 241/ 07, decision number: 01- 03- RE- 4866/ 07. 1. 3. Legal state of the issuer Municipality is a unit of local self- government and it has a status of legal person.
2. INFORMATION ON MUNICIPAL BOND OF THE FIRST ISSUE Issue of bonds of the Municipality of Laktaši with nominal value of 10, 000, 000, 00
KM, in intangible form, on the behalf of the transferable with denomination of 100 KM, and with fixed annual interest of 5, 75% with maturity in 2014.(6 years from the date of registration of issue at the Republic of Srpska Central Registry of Securities). Total number of issued bonds of the first issue is 100, 000 bonds. Duties of the Issuer from the bonds represent uninsured, direct and unconditional duties of the Municipality of Laktaši. They have equal rights and same rank as all the other present and future uninsured duties of the Municipality of Laktaši apart from those that have rights to priority according to regulations. Duties of the Issuer on the basis of bonds issue, that is, payment of principal and interest will be done from the ordinary budget revenues of the Municipality till maturity. In order to keep real value, in case of the change of KM currency rate against EURO, currency clause (conversion of KM into EURO, that is, from EURO into KM) according to mean rate and exchange list of the Bosnia and Herzegovina Central Bank on the date of the change of exchange rate will be applied. 2. 1. Name of the body that made a decision on issue and decision- making date The Municipal Assembly of the Municipality of Laktaši made a decision on the first issue of bonds by tender no: 01- 022- 156/ 07 at regular meeting held on 30th November, 2007. 2. 2. Ordinal number of issue, type and class of Securities Ordinal number of the issue: The first issue of bonds of the Municipality of Laktaši by tender. Type of the securities: Long- term municipal bonds. Decision of the Republic of Srpska Ministry of Finance no: 06. 04/ 400- 1077- 1/ 07, date: 9th November, 2007. is in agreement with the Municipality of Laktaši to debit on the basis of municipal bonds issue at the local capital market with total nominal amount of 10,000,000,00 KM. Bonds will be annuity which means that principal and interest will be paid twice a year to the same amounts. Bonds will be issued for the period of 6 years. The Municipality will sell bonds on its nominal value. Nominal value of a bond amounts to 100 KM. Main rights of the bond owner are rights to payment of principal and interest. 2. 3. Selling price and method of its establishment Selling price of Bonds is 100, 00 KM per bond, and price for registration and payment of bonds will be established according to the method of continuous tender (multiple prices) and according to rules of the Banja Luka Stock Exchange.
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2. 4. Interest accounting Bonds will have interest for non-paid part of principal according to unchangeable interest rate of 5, 75% a year. Interest rate will be counted as annual interest rate of the Bonds divided by frequency of payment of interest according to matured coupon from the Bonds at annual level. Considering that coupons mature to payment twice a year, interest will be paid semi-annual, and interest rate of the Bond coupon is 2, 875% (for unpaid part of principal). Real number of days in period for interest accounting including maturity day of the last interest according to matured coupon but not including maturity day of the next interest according to matured coupon will be taken into account for the accounting of acquired interest from the Bond. 2. 5. Payment of principal and interest Payment of principal and interest will be done at least fifteen days after the day of coupon maturity. In case of delay of interest payment and due to principal part, the issuer is obliged to pay default interest. Maturity day of principal and interest according to the Bond will be counted since the day of registration of the Bond Issue at the Republic of Srpska Central Registry of Securities. Example of principal and interest payment: If date of registration at the Central Registry is 10th April, 2008, principal and interest will be paid according to the following plan; The first payment of principal and interest will be on 25th October, 2008. for the period since and including the date of registration 10th April, 2008, till but not including 10th October, 2008. The following coupons will be paid semi- annual: • 25th April, 2009 for the period since and including 10th October, 2008 till, but not including 10th April, 2009. • 25th October, 2009 for the period since and including 10th April, 2009 till, but not including 10th October, 2009. • 25th April, 2010 for the period since and including 10th October, 2009 till, but not including 10th April, 2010. • 25th October, 2010 for the period since and including 10th April, 2010 till, but not including 10th October, 2010. • 25th April, 2011 for the period since and including 10th October, 2010 till, but not including 10th April, 2011. • 25th October, 2011 for the period since and including 10th April, 2011 till, but not including 10th October, 2011. • 25th April, 2012 for the period since and including 10th October, 2011 till, but not including 10th April, 2012. • 25th October, 2012 for the period since and including 10th April, 2012 till, but not including 10th October, 2012. • 25th April, 2013 for the period since and including 10th October, 2012 till, but not including 10th April, 2013. • 25th October, 2013 for the period since and including 10th April, 2013 till, but not including 10th October, 2013. • 25th April, 2014 for the period since and including 10th October, 2013 till, but not including 10th April, 2014.
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Example of principal and interest payment plan: Maturity date of principal and interest
Part of immature principal with nominal value of the securities (pool factor) represents
coefficient which reduces nominal value of the securities to the amount of immature debt. At maturity of the part of principal, amount of principal proportioned to the quantity of the owned securities will be paid to the owners of Bonds. Nominal value of the securities registered on the owner position will not be reduced by the reduction of the amount of immature debt. Part of immature principal of nominal amount of the securities (pool factor) will be reduced proportionally to paid part of principal against total nominal amount of the securities.
Part of immature principal of nominal amount of the securities (pool factor) represents as a decimal number that cannot be less than 0 and higher than 1.
Non- paid part of principal and pool factor are being counted in the following way. Non- paid part of principal= nominal value of the issue*pool factor Initial pool factor= 1. Initial pool factor is effective till the date of the first payment of the part of principal. After the date of the first payment of the part of principal, pool factor for the stated period
will be counted in the following way: Pool factor in the current period= pool factor from the previous period reduced by
percentage of principal which is paid on the date of the last payment of the part of principal. 2. 6. Delay in payment of interest In case of delay in payment of coupon from the Bond, the Issuer will pay legal default interest since the last day of payment of the coupon (fifteen days since the maturity day) till the day of real payment. Legal default interest is being counted bz the following formula: S x r x n K= --------------- 100 K- default interest S- amount of mature but non- paid interest r- default interest rate n- number of years
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For counting of default interest for counting period shorter than a year, calendar number of days for that year is being applied and the following formula is being used:
S x r x d
K= --------------- 36 500 formula for the leap- year is:
S x r x d K= --------------- 36 600 K- default interest S- amount of mature but non- paid interest r- default interest rate n- number of days 2. 7. Delay in payment of bonds principal In case of delay in payment of principal from the Bond, the Issuer will pay legal default interest since the day of principal mature till the day of real payment. Legal default interest that the Issuer pays to investors according to the extract on owners bond to the Republic of Srpska Central registry for Securities is being counted bz the following formula: C x r x n K= --------------- 100 K- default interest S- amount of mature but non- paid interest r- legal rate of default interest n- number of years For counting of default interest for counting period shorter than a year, calendar number of days for that year is being applied and the following formula is being used:
C x r x d K= --------------- 36 500 formula for the leap- year is:
C x r x d K= --------------- 36 600 K- default interest S- amount of mature but non- paid interest r- legal rate of default interest n- number of days
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2.8. Buy back The Municipality of Laktaši can buy back bonds at any price on the market or at any other way at any time if that purchase by tender is available to all owners of bonds and if that tender is in accordance with legal regulations. No owner of the Bonds is obliged to accept the Issuer’s offer or he is obliged to sell any amount in his possession to the Issuer. The amount of non- paid bonds on the next date of principal payment can be reduced by the amount of bonds that the Issuer bought before the date of payment of the part of principal. Owners of bonds agree that the bonds bought in that way can be bought annulled by the Municipality at any moment without their previous agreement. 2.9. Rights stated in bonds and restrictions of those rights Main right of the Bond’s owner is payment of the principal and interest nominal value. No owner can ask pre-maturity of bonds. 2.10. Method of establishment of bonds price at secondary market Bonds will be inserted into official Banja Luka Stock Exchange Market and secondary trade with Bonds will be done at Banja Luka Stock Exchange. Price of Bonds will be based on the so called ‘clean price’ which means that it does not include acquired interest. The price will be expressed in percentage of the nominal value of the Bond. Payment after purchase of Bonds at Stock Exchange will be done according to the price of trade increased by acquired interest for the period since last payment of interest at mature coupon till the day of settlement at Stock Exchange (T+ 3), not including day of settlement. Example of secondary trade: Registration of bonds at the Central Registry on 10th April, 2008. Trade is being done on 12th April, 2008, and balancing on 15th April, 2008. Price at Stock Exchange: 100% Clean price: 100 KM Belonging interest: 0, 08 KM Total amount of transaction: 100, 08 KM
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2. 11. Method of payment of principal and interest Accounting and settlement in secondary trade with bonds will be done by the Republic of Srpska Central Registry of Securities, a. d. Banja Luka. Annuities that contain interest and belonging part of principal will be paid at least fifteen days since the day of annuity expiration. Business bank where the Municipality opened gyro account will pay funds received from the Municipality on the behalf of interest and principal according to the report on number of Bonds owned by each investor to investor’s account through wages system. If maturity day of principal, interest and other amounts resulted from Bonds is holiday, payment will be done on the first working day. Working day is a day determined as a working day of the Republic of Srpska Central Registry for Securities, business banks and foreign exchange market that carry out payment in the Republic of Srpska and Bosnia and Herzegovina.
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3. INFORMATION ON BUSINESS ACTIVITIES OF ISSUER 3.1. General information 3.1.1. Geographic position
The Municipality of Laktaši is placed in the north- west part of the Republic of Srpska, that is, Bosnia and Herzegovina, at the territory between municipalities of Banja Luka, Gradiška, Srbac, Prnjavor and Čelinac. It is settled between 44°46’ and 44°59’ north latitude and between 17°10’ and 17°29’ east longitude.
Area of the territory consists of three relief parts: Župa, Lijevče and Potkozarje. According to the characteristics of the relief, it is obvious that flat ground (lowland) relief of Lijevče polje and low terrace of the Vrbas and its tributaries dominate the middle parts, while short mountains and hills dominate boundary parts. Average altitude is 125 m.
The River Vrbas runs through the middle part of the Municipality and divides it into župski (right bank of the Vrbas) and potkozarsko- lijevčanski part (left bank of the Vrbas). It is enriched by thermal and thermo-mineral water which is directly connected to geological and tectonic characteristics of wider Banja Luka region.
The Municipality of Laktaši has good connection with neighbouring municipalities and wider surrounding thanks to its favourable geo-strategic position and existing traffic infrastructure. Trunk road M- 16 as main regional communication that connects north and south parts of this region goes through the middle part of the Municipality. The other important route that connects west and east parts of the Republic of Srpska is trunk road M- 16, 1 Klašnice- Bijeljina.
Closeness of Banja Luka, a big urban, administrative, economic and cultural centre in the south and Gradiška, a town situated at the boundary in the north, determine the way of life and work of the residents of this area. Great importance has got Banja Luka airport that is 3 km away from the centre of Laktaši and which enable connection of the whole region with neighbouring and other countries. 3.1.2. History and development
There were settlements at the area of present- day Municipality of Laktaši in prehistoric period and oldness of the finding places is between 60 000 and 10 000 BC.
Romans who ruled over this area since 6 to 9 AD carried out Romanization of local Illyrian residents, constructed military properties and buildings with great economic value. Position of the Municipality at the border of newly formed provinces Dalmatia and Pannonia determined its communication importance. One of the main roads which led from the Adriatic Sea to the River Sava and Pannonia and which connected Salona (Solin next to Split) and Servitium (Gradiška) went through the area of present Laktaši. Traces of the Roman architecture are preserved at several locations.
Rule of East Goths, Avars and Slavs followed one another which proves archeological findings from that period.
Turks conquered the territory of the present municipality at the beginning of 16 century and ruled over it for 350 years. Because of the importance of this territory as a boundary part towards Austria, Turks forced relocation of orthodox Serbian residents from mountainous parts of east Herzegovina, Montenegro and Lika to Lijevče polje and Potrkozarje.
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Bosnia and Herzegovina became a part of Austro- Hungarian monarchy that settled Italians, German, Ukrainians and Poles to the area of Lijevče polje and Potkozarje since 1878. German and Italian residents applied modern agro-technical measures and raised economy to the higher level, therefore this area became the most developed part of Bosnia and Herzegovina.
After downfall of the Austro- Hungarian monarchy in 1918, the territory of the municipality became a part of the Kingdom of Serbs and Croats. That period was characterized by low level of economic development. Agriculture was the main occupation. The Kingdom of Serbs and Croats changed its name into the Kingdom of Yugoslavia in 1929 and by division of the country into ban’s domination countries, this territory became part of Vrbanska banovina.
After World War II, the territory of present Municipality of Laktaši was without economic facilities, health centers, roads, water supply, electricity and there were very small number of the employed. The area and territorial organization of the Municipality within present boundaries were defined in 1955. Considering level of economic development at the territory of the former SFRJ, the Municipality of Laktaši belonged to the group of undeveloped municipalities.
The second part of 1980s was the beginning of creation of so called ‘economy miracle in Laktasi’ when private entrepreneurship appeared. Number of the employees in private sector as well as number of registered entrepreneurs and private companies was raised in that period.
The previous war left great consequences in all areas of economic and social life although there were no direct military actions on the territory of the Municipality. Certain economic facilities have been reconstructed and constructed recently. Infrastructural network has been expanding. Therefore, Laktaši as a municipality has become entrepreneur center in the Republic of Srpska, that is, Bosnia and Herzegovina. 3.1.3. Territorial organization and estimated number of residents
The Municipality of Laktaši consists of 37 settlements that are territorially and administratively grouped into 11 local communities. Estimated number of residents at the territory of the Laktaši Municipality is 40. 742 residents in 2007. The biggest settlements are: Laktaši, Trn, Slatina and Aleksandrovac.
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3. 2. Economy of the Municipality Intensive development of economy at the territory of the Municipality of Laktaši started in the second part of 1980s thanks to created positive business environment which stimulated development of entrepreneurship.1 Economy structure that was created then, had positive influence on development of economy and it determined present economic structure. The most developed branches of the economy at the territory of the Municipality are: trade, industry (foodstuffs industry, metal industry, electrical equipment industry and timber and wood manufacturing industry), civil engineering industry and activities in regard with real estate, renting and other business activities. Economic activities with favourable natural conditions are agricultural production (cultivable land) and tourism (''Slatina'' spa and ''Laktaši'' spa).
Structure of the economy in 2006.
TOTAL INCOME
Trade, 55,66%
Other, 4,55%
Civil enginee-
ring industry, 6,26%
Activit-ies in regard
with real estate,
13,53%
Industry, 20,00%
NUMBER OF THE EMPLOYED
Industry, 30,22%
Activit- ies in regard
with real estate, 7,43%
Civil enginee-
ring industry, 8,33%
Other, 30,30% Trade,
23,72%
Activity with the biggest participation in total accomplished revenue at the territory of the Municipality in 2006. was trade (55, 66%). Within the scope of trade2, wholesale trade has a dominant role and it is more and more orienting to representation of well known companies. Industry and mining employ the biggest number of workers (30, 32% of the total number of the employed), and number of the employed in this area was grown by 20, 56% in comparison with 2005. Positive business operations of the majority of business activities with high growth rate of profit conditioned profit growth accomplished at the level of the economy of the Municipality by 70% (extended trend of profit growth- the following graph).
1 Encouragement of entrepreneurship development is strategic determination of municipal government since the middle of 1980s till today. Constant raise of quality, speed and level of services significantly influence selection of the Municipality as a place for setting new business. According to the project ‘Quick procedure’, entrepreneur shop can be registered in Laktaši in one day. Essence of the project is that municipal body of administration permits work, provides tax number (UIN), registers entrepreneur at SDI Fund and Health insurance fund upon the request of entrepreneur. 2 Wholesale trade and retail trade; repair of motor vehicles, motorbikes and stuffs for personal usage and household.
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Level of the business activity at the territory of the Municipality measured by total income was less by 4, 11% in 2006. in comparison with 2005 (discontinued trend of total income growth- the following graph) mostly because of reduction of total revenue accomplished in the area of trade by 15, 03% which was partly compensated by growth of total income in the area of the industry and mining by 21, 45%, that is, activity in regard with real estate by 18, 75%. Reduction of participation of trade in total income and profit points at gradual change of economic structure with simultaneous participation growth of industry and mining, that is, activities in regard with real estate and civil engineering.
Progress of total income and profit in period between 2002. and 2006.
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
(in 000) КМ
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
(in 000) КМ
Total income 544,177 697,260 924,506 1,157,246 1,109,730
Profit 23,711 28,505 34,536 38,824 66,002
2002 2003 2004 2005 2006
Within the scope of the total income of the Republic of Srpska economy, the Municipality of Laktaši participated with 9, 27% in 2006, and within accomplished net profit with 10, 49%. Pole of economic development of the Municipality makes activity of great number of small and middle sized enterprises in all scopes (500 enterprises from 540 legal persons and significant number of business units), entrepreneur shops (1032 shops), two big enterprises. Legal persons registered at the territory of the Municipality make 4, 71% of all registered legal persons in the Republic of Srpska. The greatest number of enterprises and entrepreneur shops do business operation within the scope of trade (about 40% of all legal persons and entrepreneur shops at the territory of the Municipality). 8070 persons were employed in 2006. (3, 14% of all employed in the RS), which was higher by 14, 31% than in 2005, and in March, 2007, there were 8 740 employed persons (3, 40% of all employed in the RS). Simultaneously, unemployment rate 3 was decreasing constantly and in 2006. it amounted to 23, 54% (36, 2% in the RS). There were 2 421 3 Unemployment rate calculated as proportion between number of the unemployed and total number of the unemployed and the employed, and on the basis of data on unemployment (active offer of labour force) on 30th September, 2006. (the RS Employment bureau, Bureau in Laktaši) and employment from September, 2006. (the RS Republic Bureau of Statistics, Banja Luka).
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unemployed persons on 31st December, 2007 (1, 73% of the total number of the unemployed in the RS) and there were 2 012 unemployed persons on 30th September, 2007. Progress of number of legal persons, shops and the employed was showed in the following graph.
Number of legal persons, number of shops and number of the employed
95
1.132
5.623
417
772
6.160
459
897
5.654
497
929
6.421
503
978
7.060
540
1.032
8.070
0
1.000
2.000
3.000
4.000
5.000
6.000
7.000
8.000
9.000
1990 2002 2003 2004 2005 2006
Number of legal persons Number of shops Number of the employed
The biggest export enterprises with head office at the territory of the Municipality are: Kolektor Bosna (electro industry), Integral- inženjering (civil engineering and engineering), DI Vukelić (timber and wood manufacturing industry), Iskra AE components and CNC production (electro industry). Participation of the Municipality in total export of the RS amounted to 3, 80% in 2006, and in first nine months in 2007, it amounted to 8, 28%.
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3.3. Sport, manifestations and culture Sport has got long- standing tradition at the area of the Municipality. More significant development of sport and formation of clubs began in the 1960s. Top sports organization focused on popularization of sport, organization of competitions, education of qualified personnel for work in sports clubs and coordination of work of sports staff is Association of Sportsmen of the Municipality of Laktaši. 23 sports collectives do activities in different sports areas (football, basketball, judo, chess, bowling, volleyball, diving, swimming, hunting, fishing, etc.) at the territory of Laktaši nowadays. There are four professional clubs (three football clubs and a basketball club). All the others belong to amateur sport. Professional football clubs are: FC ‘Laktaši’ Laktaši that competes in Premier League of Bosnia and Herzegovina since this season, FC ‘Sloga’ Trn that owns great football tradition and FC ‘Župa’ Milosavci that significantly improves within organizational- technical sense in the last few years. Basketball school that has 150 members, the rising generation of football clubs and Judo club ‘Sun’ Laktaši are very important for popularization of sport and finding of new young talents. The most successful professional sports collective is Basketball club ‘Igokea’ Aleksandrovac. This basketball club achieves significant results competing at the level of the Republic of Srpska, Bosnia and Herzegovina and European level. Basketball club ‘Igokea’ Aleksandrovac was champion of basketball championship of BiH in the season 2000- 2001. and it won the BiH Cup in 2006/ 2007. Contract with ‘Partizan’ Belgrade on business and sports cooperation was signed recently. The Municipality of Laktaši possesses great number of facilities for competitive and recreation sports. They are mostly placed close to the primary schools and they are used for activities of physical education and sport of their pupils as well as sports competitions. Great number of sports manifestations was being held at the territory the municipality of Laktaši:
- Street basket - May cross race - Cycling - Competition of primary schools - Small Olympics - Street basket- Aleksandrovac - Election of the sportsman of the year - ‘Small’ football tournament - Đurđevdan Cup - ‘Center 2007’ football tournament - ‘Sinisa Vukelić- Sina memorial tournament - Martial arts - Regatta - ‘Fat and thin’ tournament - ‘Slatina 2007.’ jeep rally - Small traffic school- polygon - ‘Children in traffic’ competition of primary schools
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Besides sports manifestations, many cultural manifestations in whose organization all institutions and associations participates according to their activities and available material and personnel possibilities are being held. The most important cultural manifestations are: - Festival of amateur theatres - Cartoon salon - Homeland authors of the municipality of Laktaši - Let’s look forward to Đurđevdan and spring- education - Easter manifestation - Annual concert of KUD - ‘Pčelice 2007.’ Children festival - Arts colony - Kalena - Martinovanje - Lake manifestation and election of the most beautifully arranged garden - Laktaši summer games - Youth camp Institution ‘Civic centre’ possesses show- room, state room with 500 seats (for cinema, theatre, and other shows), rooms for training and lectures as well as appropriate offices for organization of cultural manifestations. Besides the above mentioned manifestations, it is important to mention Strawberries days and Wine days, manifestations that are being held every year in order to encourage agricultural production. Considering development of culture at the area of the Municipality of Laktaši, Sokolsko društvo that had amateur theatre group, choir and tambura orchestra was operating at the territory of the Municipality of Laktaši in period between two world wars. Nowadays, institutions ‘Civic centre’, ‘National library’, Serbian educational- cultural association ‘Prosvjeta’ and Cultural- artistic association ‘Slavko Mandić’ are performing within the scope of culture at the territory of the municipality. The first library in Lataši was opened in 1962. ‘Library’ owns about 25 000 books by various authors, titles and contents adjusted to the necessity of readers. KUD ‘Slavko Mandić’ has 30 years long tradition. It took part in many festivals and folklore reviews and won a lot of awards. It keeps and shows national creativity of this region by participation in many manifestations in Laktaši and other environments as well as organization of abroad tours. The association has more than 200 members that work in three categories. It holds traditional annual concert in the last few years. SECA ‘Prosvjeta’ celebrated 100 years of its founding. This association is protector of tradition and culture of Serbian people at the territory of the municipality of Laktaši. It tends to general prosperity of everyone in this region. ‘Prosvjeta’ is a member of the Republic of Srpska editors’ association since 2002. and it tends to offer whole contribution to accomplishment of cultural activities.
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3. 4. Local government and self- government Operation method of local government was defined by the Act on local self- government. Bodies of local self- government (Municipal Assembly and the Head of the Municipality) were established by the same Act. 3. 4. 1. Municipal Assembly Municipal Assembly is body that makes decisions and creates municipal policies. It also does the following: - make Statute of the Municipality, - make decisions and other general acts, and interpret them authentically - make economic plan, development plan, and investment programs, - make budget and final account, - make developmental, environmental and town planning and programs, - make decisions on management of municipal property, - make decision on membership of the municipality in Association of
municipalities and towns, and joining to other unions and organizations, - elect and relieve from duty president and vice- president of Municipal Assembly, deputy head of the municipality and secretary of Municipal Assembly, - make decision on municipal debts, - establish public and utility companies as well as institutions that perform other activities in favour of the municipality, - float a loan and voluntary tax, - announce referendum,
- give opinion on change of municipal boundaries, - make decisions on other issues according to the law. Laktaši Municipal Assembly has got 25 members of a board according to the following structure: Ordinal number Political Party Number of
members of a board 1. SNSD (Party of Independent Socio- democrats) 19 2. SDS (Serbian Democratic Party) 4 3. SPS (Socialist Party of the Republic of Srpska) 1 4. PDP (Party of Democratic Progress) 1
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STRUCTURE OF MEMBERS OF A BOARD OF LAKTASI MUNICIPAL ASSEMBLY EXPRESSED IN PERCENTAGES
76%
16%
4%
4%
SNSD SDS SPS PDP
3. 4. 2. The Head of the Municipality The Head of the Municipality represents and supports the municipality. He is executive authority in the municipality. He manages municipal administrative department and he is responsible for its performance. He also does the following: - suggest the Statute of the municipality, - suggest decisions to the Assembly, - implement policy and perform decisions and other acts of the Assembly, - perform laws and other regulations of the Republic whose performance was
delegated to the Municipality, - make decision on establishment of municipal administrative department, - establish cooperation with other municipalities, towns, international and other
organizations, - conclude contracts on the behalf of the Municipality, - make decisions on handling of funds according to the way determined by the Statute, - do other jobs determined by the law. 3.4.3. Administrative department Municipal administrative department is organized and it works according to the criteria of efficiency and economy. It is dedicated to realize vision of development of Laktaši, therefore, it truly and systematically tends to be: - Citizens service that truly considers their needs, problems and suggestions; - Entrepreneurs service that creates encouraging business environment and necessary conditions for local economic development; - Efficient- offering quick high- quality and cheap services with procedures that are simple and adjusted to clients interests; - Transparent- providing legitimacy and openness to the public, true responsibility and the same approach for everyone;
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- Open to initiatives and interests of youth, citizens from urban and rural areas, entrepreneurs, potential investors, associations and non- governmental organizations and all others who contribute to the development of the Municipality of Laktaši; - Proactive and constructive in cooperation with entity and government organizations, other municipalities, international organizations and investors. The Municipality of Laktaši owns certificate of quality system management EN ISO 9001: 2000 that is guarantee of high- quality standardized service delivery as well as orientation of the Municipality of Laktaši to its citizens and users of services since December, 2003. Regarding that, aims and quality policy that determine directions and missions of further development of local self- government with emphasis on meeting demands of standard, high- quality service delivery, constant increase of knowledge and qualifications of the employed were established. The Municipality of Laktaši is well known as a municipality that follows needs of the young. Administrative department of the Municipality of Laktaši got two awards for support and work with the young. The Municipality of Laktaši won first prize according to the participation criteria for practice ‘Participation of the young in the performance of local self- government’ at competition for the best practice of local self- government in Bosnia and Herzegovina in 2006. In April, 2007, the Municipality of Laktaši got Bikon status for theme ‘Positive engagement of the young in local community and democratic processes’ for practice ‘Institutional participation of the young at the local level’.
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Organizational structure of Administrative service:
ADMINISTRATIVE SERVICE OF THE MUNICIPALITY OF LAKTAŠI
1. OPERATIONAL SERVICE OF MUNICIPAL ASSEMBLY AND
HEAD OF MUNICIPALITY
2. DEPARTMENT FOR GENERAL SERVICE
3. DEPARTMENT FOR VETERANS DISABLED
PROTECTION
4. DEPARTMENT FOR ECONOMY AND PUBLIC
SERVICES
5. DEPARTMENT FOR URBAN DESIGN
6. DEPARTMENT FOR RESIDENTIAL- COMMUNAL
SERVICES
7. FINANCIAL DEPARTMENT DEPARTMENT FOR INSPECTION
Comparative review of educational background, sexual and age distribution of the employed in Administrative service in 2007. with 2004. EDUCATIONAL BACKGROUND OF THE EMPLOYED UNQUALIFIED WORKERS 7 7 SECONDARY SCHOOL EDUCATIONS 31 41 TWO- YEAR POST- SECONDARY QUALIFICATIONS
9 7
UNIVERSITY QUALIFICATIONS 26 42 M.A. 1 2 SEXUAL STRUCTURE OF THE EMPLOYED FEMININE 50 63 MASCULINE 24 36 TOTAL 74 99
7.1. ACCOUNTING DEPARTMENT
9. DEPARTMENT FOR MUTUAL JOBS
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AGE DISTRIBUTION OF THE EMPLOYED AGE DISTRIBUTION 2004. 2007. 20- 30 3 13 31- 40 12 17 41- 50 40 39 51- 60 19 30
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3.5. Development strategy of the Municipality of Laktaši 3.5.1. Vision
Vision of development Laktaši 2015.- place where we create new quality of life
Laktaši will be one of the first places in south- east Europe that will reach European level of competitiveness considering business operations and human resources providing prestigious quality of life for all citizens. Laktaši will promote reputation of attempting tolerant environment where young people will stay and come to create their future. Created vision of development includes time horizon until 2015. Main challenge that vision offers is new quality of life. Quality of life is general aim of most spatial and developmental strategies nowadays. In this case, vision does not mean only better life but first of all its new quality. That new quality represents creative synthesis of European model and local tradition. Spatial perspective where development of Laktaši was conceived is region of south- east Europe as a ‘market’ of locations under the process of globalization (‘think globally, act locally’). Competition for attracting investments is in progress at that market. Municipalities and towns with their specific resources, culture, atmosphere and style of management are becoming more and more important during that competition. Laktaši has very demanding role in this regional competition in order to be one of the first places in south- east Europe that will reach European level of competitiveness considering business operations and human resources. If Laktaši was able to become entrepreneur brand in very short period in former Yugoslavia in the 1980s, it is realistic to expect from them to accomplish something similar under new circumstances and new environment. That expectancy is based on its favourable position, developed entrepreneur climate and series of new advantages that were mentioned before in SWOT analysis. Three biggest steps for realization of ambitious developmental challenge were changed into the first two and part of the third strategic aims: creation of high- quality business infrastructure, creation of new economic structure and fast development of intellectual and social capital (quality of people and their relationships), as more and more effective ‘magnet’ for attempting financial capital and technologically advanced industries and services. If the first part of the vision is mostly directed towards those who can invest in Laktaši, the second part is mostly faced towards those who live (or can decide to live) in Laktaši. Future Laktaši are understood as a place that enchants with its arrangement (impeccably arranged and equipped with infrastructure) and that attempts mostly young people who want to accomplish themselves creating new quality of life for themselves and their business and life environment with specific atmosphere, culture and tolerance. Road for realization of this part of the vision is marked in the third part of strategic aim (development of culture, sport, health and social protection) and in the forth aim (ecologically advanced and constructed environment with infrastructure).
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3.5.2. From strategic aims to the projects I Business infrastructure and leadership in entrepreneurship
STRATEGIC AIM 1 High- quality business infrastructure and regional leadership in entrepreneurship
Operative aim 1.1 Operative aim
1.2 Operative aim 1.3
Operative aim 1.4
Operative aim 1.5
Space planning documentation provided till 2009.
At least 900 new working places opened in new existing business zones till the end of 2010.
Established complete service for investors with knowledge centers for support to entrepreneurs in key sectors till the half of 2009.
Earned certificate of the area appropriate for investments, the first in BiH.
Accomplished regional leadership in organizing entrepreneur manifestations since 2010.
Projects: 1. Preparation of regulation plan for expansion of urban part of Laktaši towards
the Vrbas. 2. Preparation of urban documentation for Slatina. 3. Development of business zone in Aleksandrovac. 4. Designing of purpose business zone along corridor motorway Banja Luka-
Gradiska. 5. Designing of purpose business zone along corridor motorway Doboj- Banja Luka (Laktaši). 6. Designing of business zone at the airport. 7. Marketing areas for investors. 8. Faster and cheaper services and permits for entrepreneurs and investors. 9. Construction of centre for citizen services (with reconstruction of building). 10. Integration and innovation of information centre. 11. Formation of municipal office for development. 12. Feasibility study for organisation of regional entrepreneur manifestations. 13. Organisation of selected regional entrepreneur manifestations.
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II Competitive economic structure
STRATEGIC AIM 2 Competitive business structure that optimally realises key touristy and agricultural potentials of Laktaši.
Operative aim 2.1 Operative aim
2.2 Operative aim 2.3
Operative aim 2.4
Developed touristy infrastructure till the end of 2009, fast growth of investments in tourism, specially health and country tourism in period 2007- 2012.
Growth of number of country entrepreneur households since 2008. at annual rate of 10% with constant growth of agricultural production.
Created 'critical mass' of final agricultural- foodstuff products/ horticulture till the end of 2011.
Realised binding of touristy and health offer and agricultural potentials, at last till 2010.
Projects: 14. Construction of new facilities and offer in Slatina Spa complex. 15. Construction of new facilities and offer in Laktaši Spa complex. 16. Construction of feasibility study for organizing of prestigious international car- moto races (with Banja Luka). 17. Construction of etno village. 18. Preparation of program of rural area development. 19. Arrangement of archeological site- Roman thermae. 20. Construction of etno room and space for activities of Tourist organisation. 21. Establishment of Agency for entrepreneurship (information, training, consulting, references for financial support and incubator). 22. Support to agricultural production and construction of small plants for processing of agricultural products. 23. Usage of thermal water for greenhouse production of vegetables (fesibility study). 24. Support to introduction of technical standards for small and middle sized companies. 25. Organisation of fruit and vegetables market (including purchase centre with equipment). 26. Organisation of cattle market. 27. Shopping mall in Laktasi with necessary equipment. 28. Establishment of technological centre for foodstuff industry. 29. Establishment of cooperation with municipalities and towns from abroad (Slovenia, the Netherlands, Italy, etc.) in order to facilitate transfer of technology and financing 30. Formation of touristy- health- recreation- agricultural claster
Special measures: Increase of appropriated funds to support agriculture by 3% in 2006. till at least 6% in 2010.
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III Human resources and social developed envirnoment
STRATEGIC AIM 3 Quality (proactive) management of human resources in social developed environment
Operative aim 3.1
Operative aim 3.2
Operative aim 3.3
Operative aim 3.4
Operative aim 3.5
Operative aim 3.6
Availability and quality of education significantly improved till 2010, insured preconditions for continuous education and improvement of level and structure of education.
Introduced concept of management of intellectual capital, stable growth of investment in knowledge and human resources in period 2007- 2012.
Local communities functionally prepared till the end of 2009. with arranged function rooms.
Significantly improved cultural infrastructure and offer till the end of 2009, and sports infrastructure till the end of 2010.
Insured regular improvement of health infrastructure and services in period 2008- 2012.
Insured quality social caring for imperilled categories of citizens.
Projects: 31. Formation of prestigious secondary school. 32. Equipping and repairing of primary schools for modern teaching. 33. Construction of kindergartens in rural areas. 34. Establishment of centre for trainings and re-trainings. 35. Mapping and attracting of human capital of Laktaši. 36. Introduction of cable internet and cable TV. 37. Arrangement of centres and social halls in local communities. 38. Reconstruction of Civic centre in Laktaši. 39. Construction of sports hall in Laktaši. 40. Construction of modern centre for dialysis. 41. Youth guidance centre. 42. Home for elderly people (in Slateks business complex). 43. Introduction of new forms of social caring for citizens (help at home, reception centres, …)
Special measures: Provide constant growth of budgetary appropriated funds for education in
period 2008- 2012.
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IV Ecologically advanced environment with infrastructure STRATEGIC AIM 4 Ecologically advanced environment with infrastructure in accordance with European standards
Operative aim 4.1 Operative aim
4.2 Operative aim 4.3
Operative aim 4.4
Operative aim 4.5
Operative aim 4.6
Organised handling with waste at the entire territory till 2010.
Researched main hydro-potentials with protection and exploatation plans based on plan of maintainable development.
Provided quality water supply for at least 75% of households till the end of 2010, and at least 90% of households till the end of 2012.
Constructed sewerage at the territory of Laktaši and Trn till the end of 2011.
Constructed secondary gas pipeline till the end of 2011.
Accelerated modernisation and construction of communication infrastructure.
Projects: 44. Feasibility study to solve problem of packing plant waste and animals leavings. 45. Designing and arrangement of cattle market place. 46. Improvement of sanitary conditions of wild dumps and degraded areas at the entire territory of the municipality. 47. Collecting, separation and recycling of solid waste. 48. Arrangement and protection of the Vrbas channel. 49. Arrangement of Starače wildlife refuge and construction of promenade. 50. Arrange Jelić hill in order to make weekend resort. 51. Research and planning of exploitation of geo- thermal water 52. Analysis of water potential at existing sites and eventual research and construction of new well as well as arrangement of protective zone. 53. Construction of Maglajani and Kriškovci water supply. 54. Construction of local water supplies. 55. Reconstruction of public water supply. 56. Designing of cadastre of underground installations and road infrastructure for k. o. Laktaši. 57. Construction and reconstruction of sewerage in Laktaši. 58. Construction of sewerage in Trn 59. Designing of secondary gas pipeline. 60. Construction of secondary gas pipeline. 61. Heating system of Laktaši based on hot water from pipeline 62. Widening of key local roads (Bakinci, Maglajani, Mrčevci- Kosjerovo- canal, bridge Miloševci- Kriškovci, Klašnice- Slatina) 63. Widening of road and construction of by- pass road around Slatina spa. 64. Widening and reconstruction of roads next to the motorway. 65. Construction of bridge over the Vrbas in Trn 66. Construction of bus station.
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3. 6. Capital investments of the Municipality of Laktaši The most important capital investments of the Municipality of Laktaši in the last two years are: Name of the project Amount in KM Duration of
construction Constructor
Miloševci bridge 3, 370, 690, 44 1 year ‘Integral inženjering’ d. o. o. Laktaši
Laktaši- Kosjerovo canal (Laktaši- Srbac route)
1, 999, 881, 00 6 months ‘Niskogradnja’ d. o. o. Laktaši
Public lighting (execution of works on reconstruction and modernization, construction, management and maintenance of the system of public lighting in the Municipality of Laktaši)
10, 895, 040, 00 investment will be paid in period of 10 years (private- public partnership)
16 months ‘Simens’ d. o. o. Banja Luka
Arrangement of pavement Laktaši- Klasnice
381, 441, 99 6 months ‘Niskogradnja’ d. o. o. Laktaši
The Municipality of Laktaši plans several important capital investments in the following year. Some of them are: - Reconstruction and widening of road towards Slatina, - Access road of Banja Luka- Gradiška motorway, - Maglajani- Kriškovci water supply, - Aleksandrovac- Laktaši and Klašnice – Zalužani pavements, - Construction of sewerage in Trn
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3.7. Budget of the Municipality of Laktaši
3.7.1. Legislative frame of the procedure for making and fulfillment of the budgets of the municipalities in the Republic of Srpska
Constant follow- up and application of regulations that determine earnings and distribution of incomes as well as regulations that define expenditure and tax laws are very important for planning of collection and distribution of funds. Those laws are: • Law on the RS budgetary system (the RS Official Gazette, no: 96/ 03, 11/ 04, 67/ 05, 34/ 06, 128/ 06) • Law on local self- government (the RS Official Gazette, no: 101/ 04, 42/ 05, 118/ 05) • Law on the RS debts, liabilities and guarantees (the RS Official Gazette, no: 30/ 07). It is coordinated with Bosnia and Herzegovina Law on debts, liabilities and guarantees. • Law on investments of public funds (the RS Official Gazette, no: 97/ 04) • Law on accounting and revision of the RS (the RS Official Gazette, no: 67/ 05) • Law on vault (the RS Official Gazette, no: 16/ 05) • Law on VAT (the RS Official Gazette, no: 9/ 05, 35/ 05) • Law on tax administration- re- written text (the RS Official Gazette, no: 112/ 07) • Law on income tax (the RS Official Gazette, no: 91/ 06, 128/ 06) • Law on property tax (the RS Official Gazette, no: 51/ 01, 53/ 07) • Law on games of chance tax and fun games (the RS Official Gazette, no: 5/ 99, 52/ 01, 25/ 02, 52/ 06) • Law on the RS construction site (the RS Official Gazette, no: 41/ 03, 112/ 06) • Law on civil protection (the RS Official Gazette, no: 26/ 02, 39/ 03) • Law on forests (the RS Official Gazette, no: 13/ 94, 8/ 96, 10/ 97, 23/ 98, 18/ 99, 43/ 02, 53/ 05, 91/ 06) • Law on residence tax (the RS Official Gazette, no: 118/ 05) • Law on administrative tax and benefits (the RS Official Gazette, no: 118/ 05, 37/ 01, 52/ 01, 34/ 06) • Law on children care (the RS Official Gazette, no: 4/ 05) • Law on fire control (the RS Official Gazette, no: 16/ 95, 16/ 02, 2/ 05) • Law on library occupation (the RS Official Gazette, no: 52/ 01, 39/ 03) • Law on financing of political parties from the budget of the RS, municipality and town (the RS Official Gazette, no: 17/ 00, 62/ 04) • Law on sport (the RS Official Gazette, no: 4/ 02, 66/ 03) • Order on payment of certain budgetary incomes of the Republic, municipalities, towns and funds (the RS Official Gazette, no: 73/ 05, 9/ 06, 127/ 06, 14/ 07) • Rule book on financial reports for users of budgetary incomes of the RS, municipalities, towns and funds (the RS Official Gazette, no: 73/ 05, 9/ 06, 127/ 06, 14/ 07) On the basis of analyses of implementation of budget, regulations, rule books, document on provisional budget of the Ministry of Finance and report on accomplishment of budget from the main vault book, evaluation of incomes and general expenditures structure will be done in the
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current period and in the previous year. As a result of the evaluation, notes containing planned amounts of incomes realization and inflow for the next financial year according to types of incomes and total amount as well as provisional amounts of expenditures and outflow according to categories: current expenditures and grants, capital expenditures and grants and reserve funds will be taken. According to the Law on the RS budgetary system, there is an obligation of delivery of instructions to budgetary users. On the occasion of making of instruction, it is necessary to obey the Law that regulates financing of a certain budgetary user, report on implementation of budget, report of budgetary users on expenditure of permitted funds in previous period as well as notes taken by the evaluation in regard with provisional amount of current and capital grants. It is extremely important to get quality plans and programs of investments as well as demands of budgetary users in time according to the law and instruction. This activity can be considered as critical because its realization depends on other subjects and it significantly influences further course of activities. Acquired documentation is being analyzed in details and notes on type and amount of expenditure of each budgetary user who will be financed from the budget of the municipality will be taken. All previous notes, various balances from the main vault book, reports on implementation of budget, guidelines and references for preparation of budgets of municipalities and towns and all regulations and rule books will be used for preparation of budget outline. Budget outline that was used for evaluation of annual revenues, grants, inflows, as well as identified amount of expenditures, other costs and outflows of the municipality will be formed and sent to the Head of the Municipality to consider it. The Head of the Municipality makes Decision on adoption of Budget outline according to the Law on the RS Budgetary System and the Statute of the Municipality of Laktaši. The Head of the Finance Department forwards adopted Budget Outline and Decision on Adoption of the Budget Outline of the Municipality to Finance Minister. After that, the Head of the Municipality organizes public debate on budget outline in all local communities. Finance Department considers notes taken in public debates and corrects budget outline if it is necessary. Ministry of Finance agrees on budget Outline, references and guidelines according to which Finance Department creates Budget proposal. The Head of the Municipality adopts Budget proposal making a Decision on adoption of budget proposal and a Decision on implementation on budget proposal. The Head of the Finance Department forwards adopted Budget proposal, Decision on adoption of Budget proposal and Decisions on implementation of Budget proposal of the Municipality to Finance Minister. Ministry of Finance agrees on Budget Proposal with references and guidelines. Municipal Assembly discusses on Budget proposal and implementation of budget and it makes Decision on adoption and Decision on implementation of municipality budget according to the Law on the RS budgetary system and Statute of the Municipality. In the scope of discussion, Assembly is able to make conclusions on changes of certain positions in budget that obliges Finance Department to implement them. If Assembly does not adopt Budget before financial year, Assembly makes a Decision on temporary financing proportionally with budgetary funds used in the same period in the previous year. The Head of the Finance Department forwards adopted Budget of the Municipality, Decision on adoption and Decision on implementation of Budget of the Municipality to Finance Minister. Secretary of the Assembly announces Decision on adoption of budget, Decision on
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implementation of budget of the Municipality and the Municipality Budget in Official Gazette of the Municipality according to the Law on the Republic of Srpska Budgetary System. 3.7.2. Financial reports During the whole financial year, analysis of implementation of budget and analysis of causes and consequences of inserted economic values, especially exclusions of planned revenues and expenditures according to economic and functional classification are being done. Analysis of costs of the employed, analysis of credits and liabilities, analysis of constant funds both material and intangible assets as well as analysis of general economic situation are being done. Reports of budget users considering purpose costs of allowed funds are also being analyzed. Constant follow up of financial transactions entry in main vault book is necessary. If it was noticed by analysis that realized revenues disagreed with planned approaches, budget revision would be applied according to the procedure of making of budget. Designing of financial reports was regulated by the Law on Budget System and Rule book on financial reports as well as Instruction on preparation of annual accounting of budget and funds. The Municipality Budget, Main and Supporting Vault Book and Report on property inventory are used for preparation of the report. All periodical and annual reports are delivered to the Ministry of Finance. Half year and annual reports on budget implementation are delivered to the Municipal Assembly in order to inform the Assembly. 3.7.3. Analysis of budget implementation in 2004- 2006. Revenues had growth tendency in period 2002- 2006. Revenue amounting to 10, 611, 160, 35 KM was accomplished in 2002, while in 2006, it was amounting to 19, 801, 447, 14 KM, which means that it was raised by 86, 61%.
The highest revenues growth was accomplished in 2006 mostly thanks to the increase of indirect taxes (VAT, turnover tax on goods and services in previous period amounting to 1, 054, 236, 07 KM) and capital assistance of the Republic of Srpska amounting to 1, 486, 129, 40 KM).
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Parallel review of revenues according to their types in 2004, 2005. and 2006. Ordinal number DESCRIPTION 2004 2005 2006
1 2 4 6 3 I REVENUES AND INFLOWS 13.688.180 14.581.070 19.801.447 1 TAX REVENUES 10.585.357 11.224.417 14.378.759 1.1 Revenues of income tax 9.716 13.808 11.708 1.2 Tax on personal earnings and revenues of doing
independant activities 938.293 987.174 1.204.557
1.3 Property tax 835.403 1.017.047 747.899 1.4 Turnover tax on goods and services/ VAT 8.768.837 9.191.901 12.397.830 1.5 Other taxes 33.108 14.487 16.765 2 TAX FREE REVENUES 3.063.502 3.239.242 3.847.529 3 CURRENT AND CAPITAL ASSISTANCE 39.321 117.411 1.575.160 4 PERSONAL EARNINGS OF BUDGET USERS 0 0 0 5 LONG- TERM CREDITS AND LOANS 0 0 0 II EXPENDITURES AND OUTFLOWS 12.758.559 13.507.473 18.785.329 1 TOTAL EXPENDITURES AND GRANTS 12.666.770 13.407.422 17.992.244 a CURRENT EXPENDITURES 7.275.526 8.332.615 9.427.704 b CAPITAL EXPENDITURES 5.391.244 5.074.807 8.564.540 2 DEBT REPAYMENT 91.789 100.051 793.085 SURPLUS/ DEFICIT 929.621 1.073.597 1.016.118
Current expenditures and grants 7,275,526 8,332,615 9,427,704
Capital expenditures and grants 5,483,033 5,174,858 9,357,625
2004 2005 2006
Capital expenditures and grants were higher by 70, 66% in 2006. in comparison with 2004. (that is, by the amount of 3, 874, 592, 00 KM). Current expenditures were increasing more slowly in that period by 29, 59%).
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3.7.4. Implementation of budget for the first nine months in 2007.and plan of the implementation till the end of 2007. If we exclude grants from analysis of revenues, we can talk about real increase of regular revenues of budget amounting to 1, 626, 130, 00 KM, that is, 8, 93% in comparison with 2006. The highest growth of revenues in budget plan is expected on the basis of indirect taxes. Tax revenues amounts to 56, 28% (14, 351, 000, 00 KM), tax free revenues amounts to 21, 58% (5, 502, 000, 00 KM) and grants amounts to 22, 15% (5, 647, 000, 00 KM) out of total revenues.
Parallel review of revenues according to their types for the first nine months in 2007. and implementation plan of revenues till the end of 2007.
2. TAX FREE REVENUES 2.1. Property revenues 509.259,00 704.000,00 138,24 2.2. Municipal administrative dues 164.812,00 250.000,00 151,69 2.3. Utility dues 746.689,00 842.000,00 112,76 2.4. Allowance on various bases 1.572.432,00 2.025.000,00 128,78 2.5. Revenues of rendering of various services 426.517,00 644.000,00 150,99 2.6. Municipal fines 1.799,00 3.000,00 166,76 2.7. Assets taken over from the previous year 1.000.000,00 1.025.623,00 102,56 2.8. Other revenues 2.675,00 8.377,00 313,16 3. GRANTS 3.1. Grant 2.021.936,00 5.647.000,00 279,29 Total revenues 16.571.077,00 25.500.000,00 153,88
Rise of capital grants of the Republic of Srpska that will be directed to capital expenditures by purpose influenced higher plan of revenues. Inflows on the basis of capital grants in 2007. are on purpose: - 2, 000, 000, 00 KM for reconstruction of Laktaši – Srbac route, (according to the Decision of the RS Government no: 04/ 1 - 012- 1119/ 07, ‘the RS Official Gazette’ no: 64/ 07) - 2, 000, 000, 00 KM for co-financing of construction of local roads, (according to the Decision of the RS Government no: 04/ 1 - 012- 1895/ 07, ‘the RS Official Gazette’ no: 104/ 07) - 1, 500, 000, 00 KM for reconstruction and widening of road towards Slatina, (according to the Decision of the RS Government no: 04/ 1 - 012- 1896/ 07, ‘the RS Official Gazette’ no: 104/ 07) - 80, 00, 00 KM for financing of housing construction for families of killed soldiers and disabled war veterans, - 40, 000, 00 KM for co-financing of construction of memorial tablet in Laktaši (according to the Decision no: 16- 03/ 1- 3445- 44/ 07 of Ministry of Labour and Disabled Veterans Care).
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Structure of revenues
PLAN ON THE BASIS OF REVISION
tax revenues56.28%
tax free revenues21.58%
grants22.15%
Current expenditures amounts to 45, 55%, while capital expenditures and grants amount to 55, 45% within total expenditures of the budget
Structure of expenditures
02,000,0004,000,0006,000,0008,000,000
10,000,00012,000,00014,000,00016,000,000
realisation with 30. 09. 2007. 7,433,835 5,241,875
plan 2007. 11,615,723 13,884,277
Current expenditures Capital expenditures and grants
3.7.5. Budget plan for 2008. and evaluation for 2009 and 2010. At the regular meeting of Assembly of the Municipality of Laktaši held on 21st December, 2007, Decision on adoption and Decision on Implementation of Budget for 2008. were made. Budget was planned to the amount of 43, 000, 000, 00 KM: - tax revenues, tax free revenues and current aids amounting to 19, 500, 000, 00 KM, - inflows on the basis of debts amounting to 14, 500, 000, 00 KM, - inflows of sale of permanent property amounting to 500, 000, 00 KM, - capital aids amounting to 5, 000, 000, 00 KM, and - capital aids received in 2007. amounting to 3, 500, 000, 00 KM.
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If we exclude inflows of capital profits, aids and debts from revenues that will be connected to certain capital investments, it is estimated that regular budgetary revenues in 2007. will amount to 18, 865, 000, 00 KM, and in 2008, they will amount to 19, 500, 000, 00 KM which means that there will be increase by 3, 37%.
Ordinal number DESCRIPTION Plan 2008 Evaluation
2009 Evaluation 2010
1 2 5 7 9 I REVENUES AND INFLOWS 43.000.000 21.650.000 22.100.000 1 TAX REVENUES 14.340.000 14.600.000 14.680.000 1.1 Revenues of income tax 3.000 6.000 10.000 1.2 Tax on personal earnings and revenues of doing
1.3 Property tax 930.000 894.000 842.000 1.4 Turnover tax on goods and services/ VAT 12.292.000 12.450.000 12.565.000 1.5 Other taxes 15.000 16.000 17.000 2 TAX FREE REVENUES 4.469.000 6.370.000 6.700.000 3 CURRENT AND CAPITAL ASSISTANCE 9.035.000 0 0 4 PERSONAL EARNINGS OF BUDGET USERS 656.000 680.000 720.000 5 LONG- TERM CREDITS AND LOANS 14.500.000 0 0 II EXPENDITURES AND OUTFLOWS 43.000.000 21.650.000 22.100.000 1 TOTAL EXPENDITURES AND GRANTS 40.269.800 18.560.496 18.790.758 a CURRENT EXPENDITURES 12.664.500 11.250.000 11.430.662 b CAPITAL EXPENDITURES 27.605.300 7.310.496 7.360.096 2 DEBT REPAYMENT 2.730.200 3.089.504 3.309.242
BUDGET REVENUES Within total revenues, inflows of borrowings on the basis of credit loans amounting to 4, 500, 000, 00 KM for construction of Maglajani- Kriškovci water supply according to agreement of Finance Ministry no: 06- 04- 4755- 1/ 06, dated 27th June, 2006. and borrowings on the basis of issue of long term bonds amounting to 10, 000, 000, 00 KM aimed for construction of sports hall in Laktaši according to agreement of Finance Ministry no: 06- 04- 400- 1077- 1/ 07, dated 22nd November, 2007.
tax, tax free revenues and current aids capital profits, aids and borrowings
BUDGET EXPENDITURES Current expenditures and aids were increased by 9, 03% in comparison with plan for 2007, while capital expenditures and grants were increased by 118, 49%. It is important to emphasise that there is very high contribution of capital expenditures in total expenditures amounting to 70, 55% (30, 335, 500, 00 KM). Current expenditures contribute 29, 45% (12, 664, 500, 00 KM) to total expenditures together with all expenditures of budgetary users. Inflows of permanent property sale, inflows on the basis of grants and borrowings (credit funds and bonds issue) are connected to certain capital investments whose implementation is directly conditioned by realisation of mentioned revenues.
Structure of expenditures
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
EVALUATION 2007. 11,615,723 13,884,277
PLAN 2008. 12,664,500 30,335,500
Current expenditures and aids Capital expenditures and aids
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Funds amounting to 3, 060, 159, 78 KM are planned for servicing fixed liabilities:
- debt repayment for reconstruction of Laktaši- Kosjerovo route (contract on cession with Nova Banka a. d. Bijeljina……………………897, 255, 72 KM,
- debt repayment for public lighting………………………..1, 089, 504, 00 KM,
- debt repayment for purchase of garbage lorry by Raiffeisen leasing...73, 400, 00KM
- supposed value of debt payment on the basis of bonds issue for construction of
sports hall in Laktaši....................................................1, 000, 000, 00 KM.
Projection of budget for 2009 and 2010. budgetary year is based on the increase of regular revenues by 3% in comparison with regular revenues from the previous year.
3.7.6. Consolidated balance sheet and income sheet of the Municipality of Laktaši for 2004, 2005. and 2007.
CONSOLIDATED BALANCE SHEET FOR 2004, 2005. AND 2006.
Ordinal number
Account
AMOUNT INDEX AMOUNT INDEX
Group, POSITION account 31.12.2004. 31.12.2005. (5/4) 31.12.2006 (7/5)
1 2 3 4 5 6 7 8 I ASSETS
100000 A. CASH, SHORT- TERM CLAIMS AND DEMARCATIONS AND STOCKS OF SUPPLIES AND GOODS
175 129 1
200000
2.540.116,00 4.435.030,00
5.706.566,00
2 210000 Funds and precious materials 870.776,00 1.411.044,00 162 1.607.934,00 114 3 220000 Securities 0,00 0,00 0,00 4 230000 Short- term claims 1.594.214,00 2.798.162,00 176 3.881.116,00 139 5 240000 Short- term investments 0,00 40.862,00 80.573,00 197 6 260000 Financial and accounting relations with
other connected units 75.126,00 184.962,00 246 136.943,00 74
7 110000 Stocks of materials and goods 0,00 0,00 0,00 8 120000 Stocks of small inventory 0,00 0,00 0,00 9 290000 Short- term demarcations 0,00 0,00 0,00 10 000000 B. Fixed funds 11 011000 Fixed funds 40.285.996,00 93.205.455,00 231 105.804.692,00 114 12 011900 Correction of the value of fixed funds 0,00 1.491.996,00 2.156.529,00 145 13 Value of fixed funds that is not written off
(11 minus 12) 40.285.996,00 91.713.459,00 228 103.648.163,00 113
14 041000 Other intangible investments 0,00 0,00 34.275,00 15 041900 Correction of the value of other intangible
investments 0,00 0,00 0,00
16 Value of other intangible investments that is not written off (14 minus 15)
19 090000 Long- term demarcations 0,00 0,00 0,00 TOTAL ASSETS 226 114 20 (1+13+16+17+18+19)
42.826.112,00 96.678.489,00
109.754.004,00
II LIABILITIES 21 500000 A. Short- term duties and demarcations 1.580.921,00 3.244.640,00 205 3.965.913,00 122 22 510000 Short- term current duties 11.604,00 380.805,00 3282 86.845,00 23 23 520000 Duties on the basis of the securities 0,00 0,00 0,00 24 530000 Short- term credits and loans 0,00 0,00 0,00 25 540000 Duties towards workers 0,00 3.607,00 5.851,00 162 26 560000 Financial and accounting relations with
other connected units 83.096,00 171.630,00 207 85.155,00 50
27 590000 Short- term demarcations 1.486.221,00 2.688.598,00 181 3.788.062,00 141 28 400000 B. Long- term duties and demarcations 277.198,00 2.868.915,00 1035 6.660.999,00 232 29 410000 Long- term credits and loans 277.198,00 177.148,00 64 68.093,00 38 30 420000 Other long- term duties 0,00 2.691.767,00 6.592.906,00 245 31 490000 Long- term demarcations 0,00 0,00 0,00 32 300000 V Funds resources 40.967.993,00 90.564.934,00 221 99.127.092,00 109 33 310000 Resources of fixed funds 40.009.129,00 89.067.409,00 223 97.386.771,00 109 34 320000 Other funds resources 0,00 137.084,00 163.014,00 119 35 330000 Resources of reserve funds 21.176,00 21.176,00 100 21.176,00 100 36 380000 Effects of revalorization 0 0 0 37 390000 Surplus of income and expenditures that are
not disposed 937688 1339265 143 1556131 116
TOTAL LIABILITIES (21+28+32) 42.826.112,00 96.678.489,00 226 109.754.004,00 114
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CONSOLIDATED
INCOME SHEET FOR 2004. 2005. AND 2006.
AMOUNT INDEX AMOUNT INDEX
Ordinal number
Account group, account
POSITION 31.12.2004. 31.12.2005. (5/4) 31.12.2006. (7/5)
1 2 3 4 5 6 7 8 I Expenditures 1 600000 (2+34)
8.023.146,00 8.641.674,00 108 10.127.562,00 117
A. Current expenses 2 610000 (3+6+7+17+25+29)
8.023.146,00 8.641.674,00 108 10.127.562,00 117
3 611000 a) Salaries and benefits of the employed and members of a parliament (4+5)
1.132.559,00 1.889.254,00 167 2.525.052,00 134
4 611100 Gross salaries and benefits 831.941,00 1.483.832,00 178 1.989.451,00 134 5 611200 Reimbursement of the employed and members of a
parliament 300.618,00 405.422,00 135 535.601,00
132 6 612000 b) Taxes and contributions on other personal
salaries 539.504,00 136.807,00 25 186.907,00
137 7 613000 v) Costs of materials and services (8 do 16) 1.817.769,00 1.928.005,00 106 2.295.762,00 119 8 613100 Travel expenses 33.625,00 32.440,00 96 63.105,00 195 9 613200 Expenses of power 218.745,00 286.196,00 131 268.550,00 94 10 613300 Expenses of utility and communication services 102.714,00 100.547,00 98 126.091,00 125 11 613400 Purchase of materials 318.693,00 150.263,00 47 213.531,00 142 12 613500 Expenses of transport and fuel services 48.888,00 36.327,00 74 50.604,00 139 13 613600 Rent of property and equipment 0,00 3.000,00 14 613700 Costs of current maintenance 580.471,00 658.470,00 113 883.329,00 134 15 613800 Costs of insurance, banking services and payment
operation 71.118,00 34.988,00 49 42.885,00
123 16 613900 Agreed services 443.515,00 628.774,00 142 644.667,00 103 17 614000 g) Current aids (18 do 24) 3.757.363,00 4.358.467,00 116 4.403.918,00 101 18 614100 Help to other levels of Government 144.182,00 74.003,00 51 123.544,00 167 19 614200 Help to individuals 900.669,00 2.229.419,00 248 2.180.019,00 98 20 614300 Help to unprofitable organizations 2.712.512,00 2.055.045,00 76 2.100.355,00 102
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21 614400 Subsidies for public enterprises 22 614500 Subsidies for private enterprises 23 614600 Subsidies for financial institutions 24 614700 Help abroad 25 615000 d) Capital help (26 do 28) 747.620,00 309.058,00 41 699.858,00 226 26 615100 Capital help to other levels of Government 0,00 0,00 0,00 27 615200 Capital help to individuals and unprofitable
organizations 747.620,00 309.058,00 41 699.858,00
226 28 615300 Capital help abroad 0,00 0,00 0,00
B. Expenses for interests and other benefits 71 29 616000 (30 do 33)
28.331,00 20.083,00
16.065,00 80
30 616100 Loan interests accepted through country 0,00 0,00 0,00 31 616200 Expenses for foreign interests 0,00 0,00 0,00 32 616300 Internal credits interests 28.331,00 20.083,00 71 16.065,00 80 33 616400 Other benefits connected with crediting * 34 680000 V. Remittances for lower consumer units 0,00 0,00 0,00
37 711000 Income and profit tax (38 do 40) 9.716,00 13.808,00 142 11.708,00 85 38 711100 Income tax 9.716,00 13.808,00 142 11.708,00 85 39 711200 Enterprise profit tax 40 711300 Income tax of capital profit 41 712000 Social insurance contribution 42 713000 Personal earnings tax and revenues of individual
business operations 938.293,00 987.173,00 105 1.204.557,00 122
43 714000 Property tax 835.404,00 1.017.047,00 122 747.899,00 74 44 715000 Tax on transport of products and services(45 do 47) 8.768.837,00 9.191.902,00 105 12.397.830,00 135 45 715100 Tax on products transport 7.364.226,00 7.638.017,00 104 11.729.977,00 154 46 715200 Tax on services transport 1.220.292,00 1.545.433,00 127 667.853,00 43 47 715300 Additional tax to some services 184.319,00 8.452,00 5 0,00 0 48 716000 Tax on international trade and transaction 0,00 49 719000 Other taxes 33.108,00 14.487,00 44 16.765,00 116 50 720000 B. Tax free revenues 3.063.501,00 3.239.242,00 106 3.847.529,00 119
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43
(51+57+63+64) 51 721000 Revenues of entrepreneurs activities and property and
revenues of positive exchange rate differentials (52 to 56)
677.172,00 763.089,00 113 337.669,00
44 52 721100 Revenues of public enterprises and financial public
institutions that are not financial 0,00 0,00 0,00
53 721200 Other property revenues 677.172,00 763.089,00 113 337.669,00 44 54 721300 Interests of loans and participation in capital 55 721400 Benefits of loans and participation in capital 56 721500 Revenues of positive exchange rate differentials 57 722000 Benefits, taxes and revenues of public services
rendering (58 to 62) 1.678.069,00 1.682.483,00 100 2.522.735,00
150 58 722100 Administrative taxes 245.877,00 250.810,00 102 223.174,00 89 59 722200 Stamp duties 0,00 60 722300 Utility taxes 539.801,00 613.327,00 114 720.856,00 118 61 722400 Benefits on different bases 725.115,00 697.275,00 96 1.472.941,00 211 62 722500 Taxes of public services rendering 167.276,00 121.071,00 72 105.764,00 87 63 723000 Fines 14.702,00 13.999,00 95 3.866,00 28 64 729000 Other tax free revenues 693.558,00 779.671,00 112 983.259,00 126 65 730000 V. Current help (66) 39.321,00 117.411,00 299 89.030,00 76 66 731000 Current help (67+68) 39.321,00 117.411,00 299 89.030,00 76 67 731100 Foreign help 8.801,00 0 30.000,00 68 731200 Help from other levels of authority 30.520,00 117.411,00 385 59.030,00 50 69 780000 G. Revenues from the Budget of lower consumer units 70 III SURPLUS/ DEFICIT
SURPLUS OF REVENUES 105 71 (35-1)
5.665.034,00 5.939.396,00
8.187.756,00 138
SURPLUS OF DEFICIT 105 72 (1-35)
-5.665.034,00 -5.939.396,00
-8.187.756,00 138
73 COVERED: from credit COVERED: from surplus of revenues 74 of the previous year
75 COVERED: from other resources 76 UNCOVERED
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3.8. Information on debt of the Municipality of Laktaši 3.8.1. Legislative frame of debts of municipalities in the Republic of Srpska Borrowing and giving guarantees of municipalities in the Republic of Srpska was regulated by the Law on borrowing, debt and guarantees of the Republic of Srpska (‘the RS Official Gazette no: 30/ 07, 20th April, 2007.) that is in agreement with the Law on borrowing, debt and guarantees of Bosnia and Herzegovina (‘Bosnia and Herzegovina Official Gazette no: 52/ 05, 2nd August, 2005.) Restrictions on borrowings of municipalities are regulated by Articles 48- 50 of the Law on borrowing, debt and guarantees of the Republic of Srpska. Article 48 of the Law on borrowing, debt and guarantees of the Republic of Srpska: municipality can debit only if in period of debt creation, total amount of debt that dues to payment according to suggested debt and total outstanding existing due debt in any following year does not amount over 18% of the amount of its regular revenues realized in previous financial year. Article 51 of the Law on borrowing, debt and guarantees of the Republic of Srpska regulates procedure of municipalities borrowing that consists of following steps:
- municipality can debit only if Municipal Assembly makes decision on borrowing,
- announcement of notice that the decision on borrowing will be considered at the following meeting at least 15 days before the date of meeting holding of the Assembly in one of the daily newspapers that is issued at the territory of the municipality and official internet presentation.,
- decision on borrowing is delivered to the RS Finance Minister in period of 10 days since the day of its making.
Article 52 of the Law on borrowing, debt and guarantees of the Republic of Srpska defines the following: ‘Debt of the Municipality can be made by:
- credit agreement, - issue of the securities.’
Article 55, Paragraph 2 of the Law on borrowing, debt and guarantees of the Republic of Srpska regulates purpose of borrowing: ‘Municipality can be debited long- term for:
a) financing of capital investments, b) refinancing of outstanding long- term debt that was made according to Item a)
of this Paragraph.’ Article 57 of the Law on borrowing, debt and guarantees of the Republic of Srpska defines usage of funds: ‘(1) Credit funds can only be used for permitted purpose. (2) According to the decision of the Municipal Assembly, credit funds can be temporary invested before their purpose usage in accordance with the Law that defines investments of public funds.’
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Article 71 of the Law on borrowing, debt and guarantees of the Republic of
Srpska says: ‘In transitional period of three years since the day when this Law becomes effective, municipality has to get permission of Finance Minister for every new borrowing that causes future annual installments whose total borrowing cannot be over 10% of regular annual revenues of the municipality in any financial year.’ 3. 8. 2. Borrowing procedure of the Municipality of Laktaši by bonds issue On 26th October, 2007, Municipal Assembly of the Municipality of Laktaši made Decision on borrowing of the Municipality by bonds issue in order to construct sports hall in Laktaši no: 01- 022- 135/ 07. The RS Ministry of Finance made Decision on agreement with the Municipality of Laktaši to debit on the basis of bonds issue (no: 06. 04/ 400- 1077- 1/ 07, 9th November, 2007.) with total nominal value of 10. 000. 000, 00 KM. 3. 8. 3. Amount of accrued interest and their participation in total interests on
the day of decision making on issue and debt dated 31st December, 2007. Total interest on the day of decision making on the issue amounts to 10.848.939, 94 KM, they refer to agreed interests:
- debt repayment for reconstruction of Laktaši- Kosjerovo route (contract on cession with Nova Banka a. d. Bijeljina……………………972.027, 12 KM,
- public lighting……………………………………………9.533.160, 00 KM,
- II phase of construction of Laktaši- Kosjerovo route (contract on reschedule of
assets with Balkan Investment Bank).................................124.990, 12 KM
- construction of pavement in Klasnice and paving with asphalt of streets:
road towards cemetery in Jakupovci, street in industrial zone and Dositejeva
Street in Trn towards Metalorad (contract on reschedule of assets with Balkan
Investment Bank).................................41, 666, 67 KM
- purchase of garbage lorry by Raiffeisen leasing................177.096, 03 KM
Total....................................................................................10.848.939, 94 KM
In November, accrued interest amounted to 338, 328, 41 KM were paid.
Debt servicing of the municipality of Laktaši amounted to 10, 510, 611, 51 KM on 31st December, 2007. It refers to contractual duties and consists of:
- debt repayment for reconstruction of Laktaši- Kosjerovo route (contract on
cession with Nova Banka a. d. Bijeljina……………………897, 255, 81 KM
- public lighting……………………………………………9, 442, 368, 00 KM,
- purchase of garbage lorry by Raiffeisen leasing................ 171, 033, 26 KM
Total....................................................................................10, 510, 657, 07 KM
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Review of duties of accepted credit and taken over duties according to years expressed in KM:
Ordinal number Year Laktaši- Kosjerovo route Public lighting Leasing lorry Total
TOTAL 897.255,81 9.442.368,00 171.033,26 10.510.657,07
In 2007, World Bank’s credit (for reconstruction and rehabilitation of water supply system) was paid totally as well as short- term interests in accordance with contract on reschedule of assets with Balkan Investment bank for II phase of construction of Laktaši- Kosjerovo route and construction of pavement in Klašnice and paving with asphalt of streets). Debt on the basis of contract on cession with Nova Banka for reconstruction of Laktaši- Kosjerovo route will be paid till the end of 2008. Besides borrowing of the Municipality of Laktaši by bonds issue, procedure for realization of borrowing amounting to 6, 913, 457, 11 KM for construction of Maglajani and Kriškovci water supply system is in progress. 3.8.4. Debt state according to existing and proposed debts Review of annual repayment of long- term duties for 2008- 2021. expressed in KM (contractual and proposed debts)
The table shows that the Municipality of Laktaši fulfills restrictions from the Law on borrowing, debt and guarantees of the Republic of Srpska, that is, that total repayment is less by 18% than regular revenues in any of the considered years.
3.9. Pledges, mortgages and other restrictions on the issuer’s property There ere no pledges, mortgages and other restrictions on the property of the Municipality at the moment. 3.10. Legal procedures There is not any legal procedure in progress that can significantly affect financial situation of the Municipality or endanger planned dynamics of annuity payment at the moment.
4. INFORMATION ON PLACE, METHOD, DEADLINE AND TIME OF REGISTRATION AND PAYMENT 4.1. List of places for registration and payment, name, head office and address of
bank where suspense account was opened for deposing of payments Registration is done at authorized stock brokers at the Securities Market of the Republic of Srpska according to the working hours of authorized stock brokers. Payments will be realized onto account with deposit bank, Balkan Investment Bank a. d. Banja Luka, 8 Bana Milosavljevića Street. Suspense account no: 568- 704- 12000002- 45. Registration and payment are done so that potential buyer pay money into account of authorized stock broker by which he wants to issue an order for bonds entry and then an order for entry. Authorized stock broker transfers money according to the number of bonds entry multiplied by the price determined by entry order to the account of deposit bank. Means of payment for Bond of the first issue is money, convertible marks (KM). Beginning day for entry will be determined and announced by tender for entry of the securities in daily newspaper. Places, mail address and e- mail address where free Prospectus can be got will be marked. 4.2. Deadline for registration and payment Beginning of entry and payment of Bonds by tender is fifteen days since the date of announcement of public invitation for the beginning of entry and payment. Entry and payment of bonds last 90 days.
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4.3. Mark on kept right of issuer to abandon the tender The issuer keeps right to end entry and payment of the first issue of bonds before determined deadline if total issue is registered and paid before the end of the deadline. 4.4. Method and deadlines for reimbursement on the occasion of unsuccessful issue
and giving up of the issuer All payments that the Issuer accepts for registered securities as well as interest on deposit will be returned to buyers within three days on acceptance of resolution of the Commission. 4.5. Criterion for the issue success Tender is considered as successful if at least 60% of the securities is registered and paid within mentioned period.
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5. STATEMENT ON INVESTMENT 5. 1. Sports hall in Laktaši- the project that will be financed by bond issue 5. 1. 1. Description of the sports hall It is necessary to construct sports hall in the Municipality of Laktaši, because there is not any building that meets sports and cultural needs of the young, sports clubs and cultural organizations. Sports hall is planned to be multifunctional zone where cultural and sports activities would take place as well as different manifestations (fairs, exhibitions, concerts, festivals) with local and regional character. Sports hall in Laktaši should be place for gathering of local residents. Site planned for construction of sports hall is located in Laktaši next to Laktaši- Srbac route (200 m from the centre of Laktaši) on the right going from Laktaši to Srbac, that is, in the frame of Sports- recreation centre defined by Regulation plan. Planned sports hall has capacity of 3000 seats and surface of clearance on the ground floor is 4 800 m2 . Besides building of the sports hall, the complex includes access road with pavements, parking, paved pedestrians access square around the hall, parks and public light. Considering all requests on exploitation of the building (durability, usage, maintenance), construction of building that shows combination of reinforced- concrete construction and roof structure of improved wood was chosen. Main concept of the sports hall is Temple of Sport, and building of sports hall includes: - central hall for organization of competitions of all hall sports, - support hall for trainings, - 4 changing rooms, - changing room for the officials and ambulance, - offices for administration of the hall and sports clubs, - business premises (bars, shops, etc.). Central hall is aimed for concerts and mass cultural events. Various business manifestations (e. g. fairs) with local and regional character are planned to be held in the hall. Real gross building area is 7, 323, 00 m2 while real net building internal area is 6, 882, 76 m2 . ‘Project’ a. d. Banja Luka company designed construction plan.
Sports hall in Laktaši
5.1.2. Evaluated total value of investment and schedule for investment in sports
hall in Laktaši. 1. Total value 13, 500, 000, 00 KM 2. Time plan 07- 12/ 07 01- 06/08 07- 12/ 08 01- 06/ 09 - regulation plan ••••• - designing of the hall ••••••••• - designing of external planning ••••••••• - solution of property- rights relations •••••••••• - construction of sports hall ••••••••••••••••••••••••••••••••••• - external planning •••••••••••••••••••••• - supervision ••••••••••••••••••••••••• Total evaluated value of construction of the complex of sports hall consists of; - preparation activities and solution of property- rights relations - construction of the sports hall’ building and external planning - purchase and installation of the equipment. Sources for financing of sports hall’ complex are: - funds collected by bonds issue 10, 000, 000, 00 KM - funds from the budget of the Municipality of Laktaši and the RS budget 3, 500, 000, 00 KM.
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5.1.3. Information on permanent state of project Administrative department of the municipality of Laktaši started activities of construction of the sports hall a few years ago. Management of the Municipality of Laktaši decided to intensify those activities in 2007. in order to put the building into function as soon as possible. At the regular meeting held on 23rd April, 2007, Assembly of the Municipality of Laktaši adopted Development Strategy of the Municipality of Laktaši 2007- 2015. no: 01- 022- 57/ 07 that defines project of construction of sports hall in Laktaši within the framework of strategic aim Quality (pro- active) management of human resources in social developed environment. At the regular meeting held on 19th July, 2007, Assembly of the Municipality of Laktaši made Conclusion on approach to activities of construction and financing of sports hall in Laktaši no: 01- 022- 96/ 07. Contract on some changes of regulation plan of part of urban area of sports- re-creative centre and communal- service zone (sports hall) was concluded in July, according to the Decision of Assembly of the Municipality of Laktaši on that change. At the regular meeting held on 26th October, 2007, the Assembly of the Municipality of Laktaši adopted changes of regulation plan of some part of urban area of sports- re- creative centre and communal- service zone (sports hall) no: 01- 022- 139/ 07. In November, A. D. ‘Projekt’ Banja Luka delivered plan for construction of sports hall. Also in November, a surveyor was engaged in order to apply regulation plan to the site (terrain). Revision of plan for construction was done in December, and demand for issuing of town planning permit was sent to Minister for Town Planning, Civil Engineering and Ecology of the Republic of Srpska. Final phases for solution of property- rights relations and invitation for international open procedure for election of constructor are in progress. 5.2. Risks of investments in general On the occasion of investment in Bonds, investor consciously accepts certain risks according to own preferences of risk relations and return of investment. Considering investment in Bonds, potential investor should take into account risk factors exposed in continuation but he is directed to own evaluation and judgment on financial position of the Municipality, terms of issue as well as other factors and information that can affect success of the issue.
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5.2.1. Political risk Political risk of a country includes all risks connected to possible political instability. Considering temporary internal and foreign policy as well as Bosnia and Herzegovina policies, it can be concluded that Bosnia and Herzegovina is parliamentary democracy whose main foreign policy aim is membership in European Union that is supported by all parliamentary political parties. Political risk depends on relations of Bosnia and Herzegovina with neighbouring countries and transitional process of market economy. Increased political risk that depends on relations of legislative, executive and court power as well as unions and relation between mutual body of institutions of the Republic of Srpska and administrative service is characteristic for countries in transitional process. Political and general social risk is characteristic of all parts of one society and it is not possible to influence it from the perspective of an individual. 5.2.2. Risk of tax revenues Risk of tax revenues is included into type and height of tax revenues that ere legally determined as sources of financing of local self- government units. It means that town’s incomes depend on legally determined sources and level of business activities according to which determined tax is accounted. Significant changes of one of these factors can cause deficit of the Municipality budget with assumption of unchanged expenditures. 5.2.3. Interest risk Interest rates of this issue are adjusted to the level of interest rates on BiH banking market. The Municipality of Laktaši has no influence on behaviour of interest rates on the market, therefore increase of interest rates on the market can cause decrease of prices of this issue and that can have negative influence on investors. Decrease of interest rates on the market can cause increase of prices that will have positive effects on investors. 5.2.4. Operative risk Operative risk (information systems, procedures, human factors, documentation) comes from daily business operation of the Municipality. The Municipality is constantly exposed to this risk. 5.2.5. Credit risk Although the Municipality of Laktaši did not have credit rating got by some of the leading world rating agencies, change of credit rating of Bosnia and Herzegovina can affect price of this issue. Changes will mostly depend on macro- economic trends in internal economy. In case of budget deficit in balance of current transactions, revision of existing investment credit rating of Bosnia and Herzegovina will be caused as well as its increase. Result of this possibility could be decrease of prices of all debtor securities.
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5.2.6. The Republic of Srpska Securities Market Capital market of the RS and BiH are characterized by dominant presence of owners securities made in process of privatization, nonexistence of issues of municipal and state bonds, as well as instruments of money market issued by BiH Central Bank. This implies that for issue of municipal Bonds there are not any referential securities or referential return. Restrictive factors are size of market, weak liquidity for existing instruments, nonexistence of bigger number of domestic institutional investors. 5.2.7. Force majeure This means events that have negative influence on business of the Issuer like: a) war- invasion, force of external enemies, terrorists operations, unfriendliness (no matter whether war was declared or not), civil war, rebel or riot of enemies of the Republic of Srpska or Bosnia and Herzegovina b) break out of epidemic that affects residents and workers of the Municipality of Laktaši c) earthquakes, tornados, hurricanes, floods, fires, excluding predictable and usual climate and natural phenomena that cause damages and ruins d) significant stoppage of activities as a consequence of writs, prohibitions and similar warrants that third parties get e) collective labour disputes, strikes and activities of demonstrators apart from when they influence relations between the Municipality of Laktaši and its
workers. 5.2.8. Currency risk Convertible mark (KM) as official currency of BiH is connected to Euro. Central Bank of Bosnia and Herzegovina keeps monetary stability in accordance with ‘Currency board’ arrangement (1 KM= 0, 51129 EURO, that is, 1 EURO= 1, 95583 KM) which means that it issues local currency with total cover of free convertible foreign currency according to fiscal rate (1 KM= 0, 51129 EURO, that is, 1 EURO= 1, 95583 KM).
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6. INFORMATION ON THE PERSON IN CHARGE Milovan Topolović was born on 12th November, 1956. He is a Geography teacher who lives and works in Laktaši. He is married with two children. He gained his first working experience in textile industry in Srbac, and then he worked as a teacher in Gradiška for 16 years. Since 1997. to 2000, he worked as a director of ‘Princeza Katarina Karađorđevic’ kindergarten in Laktaši. In 2000, he was appointed to be the president of the Municipal Assembly of the Laktaši Municipality. Since 2002 to 2004, he was people’s deputy in National Assembly of the Republic of Srpska. In 2004, he was elected to be the Head of the Municipality at municipal elections by direct voting. 80% of residents supported him on that occasion. He is a member of Union Presidency of the Republic of Srpska Municipalities and Towns. He actively participated in projects connected with the process of decentralization of authority in Bosnia and Herzegovina as well as in project of designing of strategy of local administration development in Bosnia and Herzegovina. Participating in numerous international conferences, he gained experience within the scope of local administration and economic development. He applied that experience and numerous other knowledge in performing duty of the first man of the local community. He has been a member of SNSD (Association of Independent Social Democrats) since the establishment of the party. Since 1999, he has been a president of municipal board of SNSD and a member of SNSD Main and Executive Board.
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7. INFORMATION ON ISSUE REPRESENTATIVE 7.1. Name and head office of the stock exchange broker ‘Advantis broker’ a. d. Banja Luka 49, Pave Radana Street, 78 000 Banja Luka Tel: + 387 51 348 900 Fax: + 387 51 348 901 7.2. Name and surname, address of the director and members of the board of
directors of the issue representative Director Branko Kecman 56 Carice Milice Street 78 000 Banja Luka BiH Tel: + 387 51 348 900 E- mail: President of the Board of Directors Dragan Serdar Karanovac bb 78 000 Banja Luka BiH Members of the Board of Directors Nebojša Antonijević 114 Krajiških Brigada Street 78 000 Banja Luka BiH Adi Gradaščević 71 000 Sarajevo BiH
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8. STATEMENT OF THE PERSON IN CHARGE OF THE ISSUER ‘According to our conviction and all our knowledge and data that we possess, we declare that all data from this prospectus make complete and truly account of property and duties, loss and profit, financial position and issuer business, rights stated by the securities, as well as that facts that can affect integrity and authenticity of this prospectus are not omitted. The Prospectus does not hide data of material importance and does not contain data or information that can misled potential investors.’ --------------------------------------------------------------- Signature of the person in charge of the issuer
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