1
uniCredit Ghana Limited
ANNUALREPORTFOR THE YEAR ENDED 31 DECEMBER 2016
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3
iii-v2
4-56
7-91213
14-1718192021
22-68
Corporate InformationBoard of Directors Chairman’s Statement Executive Committee CEO’s Letter Directors’ ReportStatement of Directors’ ResponsibilitiesIndependent Auditor’s ReportStatement of Profit or Loss and other Comprehensive IncomeStatement of Financial PositionStatement of Changes in EquityStatement of Cash FlowNotes to the Financial Statements
Contents
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About Us
uniCredit Ghana Limited is one of the leading Savings & Loans Companies in Ghana, licensed by the BOG under the Non-Bank Financial Institutions Act 2008 (Act 774). The company is headquartered at No. 3 North Ridge Lane, Accra within the capital’s cosmopolitan arena. Since 2007, the footprints of uniCredit on the financial and banking land-scape of Ghana have been progressively distinct, with growing number of fully-networked branches spread across the Country.
uniCredit envisions becoming the most efficient and effective Savings and Loans Company operating in the SME Banking market. In furtherance of this, we seek to provide our esteemed customers with convenient, tailored and reliable banking products and services through our state- of-the-art IT infrastructure and dedicated team of profes-sionals deployed across all our branches and business units. We offer a range of personal, business and institutional financial solutions that are designed to deliver optimum value to our customers.
uniCredit is also committed to distinguishing itself through excellence, as is evidenced by its listing on the Ghana Club 100 as a member of the prestigious group of the current top 100 companies in Ghana. Again, uniCredit has been awarded the non-bank financial services of the year (2015) at the 2016 Made in Ghana Products and Services Award. These recognitions of the institution’s performance validate its focus on ensuring both productivity and op-erational vigilance to secure our customers’ interests.
With a growing balance sheet, increasing customer base, an aggressive branch expansion drive and the introduction of our robust IT infrastructure, uniCredit gives you several reasons to own any of our deposit and credit products. We keep to our brand promise in going the extra mile to delight you, our esteemed customer, through a responsive and proactive approach to handling your business needs. We also provide the following services
• Business Advisory Services • Business Planning • Financial Planning • Stock Management and • Cash Flow Forecasts • Remittance Services
Our staff are ably-equipped to address your banking concerns and guide you towards the realisation of your person-al and business financial goals. At uniCredit, we are ready to grow with you.
uniCredit...Your Caring Partner
CORPORATEINFORMATION
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To develop Financial Products and Services and make them easily accessible to our target market.
To be the most efficient and effective Savings & Loans Company operating in the SME Banking Market.
Caring Flexibility Efficiency Integrity Teamwork Accountability Professionalism
VISION
CORE VALUES
MISSION
MISSONVISIONCORE VALUES
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BOARD OF DIRECTORSMr. Frank Oppong - Yeboah ChairmanMr. Samuel Sakyi - Hyde Chief Executive Officer Mrs. Akosua Duffuor Executive DirectorDr. Kwabena Duffuor II Non - Executive DirectorMrs. Boatemaa D. Barfour - Awuah Non - Executive DirectorMr. Simeon Tawiah Non - Executive DirectorMr. Benjamin Ofori Non - Executive DirectorMiss Peggy Evans - Quartey Secretary
EXECUTIVE MANAGEMENTMr. Samuel Sakyi - Hyde CEO Mrs. Akosua Duffuor Executive DirectorMr. P. V Yeboah - Asiamah General ManagerMr. Seth Ofori - Larbi Head, Internal Audit
AUDITORSDeloitte and Touche Chartered Accountants 4 Liberation RoadP. O. Box GP 453Accra
SOLICITORMiss Peggy Evans - QuarteyP. O. Box GP 18729, Accra.
REGISTERED OFFICEuniCredit Ghana Limited No. 3 North Ridge Lane North RidgeP. O. Box GP 18729, Accra.
BANKERSuniBank (Ghana) Limited
CORPORATEINFORMATION
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1
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
BOARD OFDIRECTORS
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
2
Mr. Frank Oppong-YeboahChairman
Mr. Samuel Sakyi - HydeChief Executive Officer
Mrs. Akosua DuffuorExecutive Director
Dr. Kwabena Duffuor IINon-Executive Director
Mrs. Boatemaa D. Barfour - AwuahNon-Executive Director
Mr. Simeon TawiahNon-Executive Director
Mr. Benjamin Kwame OforiNon-Executive Director
Miss Peggy Evans - QuarteySecretary
BOARD OFDIRECTORS
3
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
4
Chairman’s Statement
Distinguished Shareholders, fellow Board Members, Ladies and Gentlemen; I welcome you once again to the 4th Annual General Meeting of your Company, uniCredit Ghana Limited.
It is my greatest honour and privilege to present to you, your Company’s Annual Report and Financial Statements for the year ended 31st December, 2016.
Operating Environment
Although 2016 was an election year, the macroeconomic environment within which we operated improved marginally. For the greater part of the year, there was improvement in electrical power generation which had posed difficulties to the economy in the previous year. The improved energy situation however did not make a significant impact on production and economic activity in 2016. That notwithstanding, the GDP growth at 3.6% was slightly higher than the forecast of 3.3%. There was also improvement in the following microeconomic indicators.
• Inflation as at December 2016 was 15.4%, after peaking at 19.2%. That was an improvment on the 2015 figure of 15.7% even though most of these improvements were realised at the tail end of the year.
• The 91-day Treasury Bill rate decreased to 16.4% as compared to 22.9% the previous year. • The 182-day Treasury Bill rate also decreased from 24.4% in 2015 to 17.6% in 2016. • The local currency remained stable up to November 2016 with the Cedi depreciating by less than 5% against the United States Dollar.
With regards to the Savings and Loans and Microfinance sector, competition remained keen as companies within the sector sought to win customers within a limited market space and economic growth. Unfortunately, there were some illegal operators within the microfinance sector which caused several unsuspecting depositors to lose their savings following the collapse of such companies. This phenomenon created a bad image for the entire Non-Bank Financial Institution (NBFI) sector. That, however, did not impact much on your Company’s deposit mobilisation drive and client outreach.
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FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
2016 Financial Performance
Your Company, uniCredit Ghana Limited, recorded an impressive financial performance. We managed to increase Total Assets from GH¢328,406,117 in 2015 to GH¢488,182,009 in 2016, representing a growth of 48.65%.
Total Operating Income for the year stood at GH¢72,515,369 compared with GH¢49,608,175 in the previous year, thus registering a 46.18% increase over 2015. Deposits increased from GH¢243,261,892 in 2015 to GH¢355,485,454 by the close of the year, registering an increase of 46.13% over 2015.
The company’s operations culminated in a Profit Before Tax (PBT) of GH¢13,779,182 and registered a growth of 45.52% over the 2015 position of GH¢9,468,660. Profit After Tax (PAT) transferred to shareholders’ funds was GH¢10,354,789 representing 25.65% over 2015 performance of GH¢8,240,901.
Dividend
The Board does not intend to recommend any dividend to shareholders. In furtherance of continuously delivering value to shareholders, the Board of Directors recommends that the income surplus balance should be ploughed back into the Company’s operations.
Stated Capital
During the year under review, an amount of GH¢5,240,019 was transferred from the income surplus account to Stated Capital, increasing it from GH¢49,861,981 in 2015 to GH¢55,102,000 in 2016. Management and staff are grateful to you, our dear shareholders, for your contributions that propelled the Company’s financial performance and expansion to the success attained.
Corporate Governance
Our Board of Directors remain committed to the success and growth of the Company. In line with local and international best practices, your Company continues to adopt good corporate governance measures in order to remain accountable to shareholders as well as other stakeholders in all areas of the Company’s operations.
The Company through its Board, Audit and Credit committees ensures compliance with regulatory requirements. In addition to these committees, there are management committees which also ensure sound business operations of the company.
Acknowledgement
I would like to take this opportunity to acknowledge the contributions of our shareholders, directors, management, staff and our cherished customers for their contributions during the 2016 financial year. We believe you will all continue to support us as we pursue new targets in our niche market.
Thank you, and God bless us all.
Frank Oppong-Yeboah
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
6
EXECUTIVECOMMITTEE
Mr. Samuel Sakyi - Hyde Chief Executive Officer
Mrs. Akosua DuffuorExecutive Director
P.V. Yeboah - AsiamahGeneral Manager
Mr. Seth Ofori - LarbiHead, Internal Audit
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FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
Dear Shareholders,
It is my pleasure to present to you the performance of the Company for the financial year ended 31st December, 2016.
Financial Performance for 2016
Balance Sheet Analysis
Our Company’s operations and financial performance over the past five years have witnessed consistency in growth and expansion of uniCredit Ghana Limited during the period. We have improved every year, and our 2016 operating results also did so significantly in line with budgeted estimates.
Customer deposits increased substantially by 46.1% from GH¢243,261,892 in 2015 to GH¢355,485,454 in 2016. The total assets of the Company recorded a 48.7% growth from GH¢328,406,117 in 2015 to GH¢488,182,009 in 2016. Loans and advances, however decreased from GH¢101,597,730 in 2015 to GH¢94,388,930 in 2016 representing a 7.9% reduction. Investments, which contributed 51.9% of total assets, amounted to GH¢253,291,673 in 2016 from the previous year’s position of GH¢139,857,730, registering a growth of 81.1%.
Income Statement Analysis
The Company continued to post profit during the year under review as it recorded a pre-tax profit of GH¢13,779,182 representing 45.5% growth over the 2015 figure of GH¢9,468,660. After making a provision of GH¢3,424,393 for Corporate Tax and National Stabilization Levy, an amount of GH¢10,354,789 became available for transfer to the Income Surplus Account. An amount of GH¢5,177,395 was also transferred from the Income Surplus Account to the Statutory Reserve Fund in compliance with section 34 of the Banks and Specialised Deposit-Taking Act, 2016 (Act 930).
CEO’s Letter
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
8
Performance Indicators and Summary of Company’s Performance over the Past Five Years
Total Assets
100000
2012
104,730156,835
203,672
328,406
488,182
2013 2014 2015 20160
200000
400000
300000
600000
500000
Loans & Advances
20000
2012
57,627
82,103 86,734
10,597 94,389
2013 2014 2015 20160
40000
80000
60000
120000
100000
Total Deposit
50000
2012
89,935123,201
162,630
243,261
355,485
2013 2014 2015 20160
100000
200000
150000
300000
350000
400000
250000
Shareholders Funds
10000
2012
9,30218,406
30,321
70,933
81,288
2013 2014 2015 20160
20000
40000
30000
60000
70000
80000
90000
50000
Loan
s & A
dvan
ces
Shar
ehol
ders
Fund
s
Total Assets
Total Deposits
Loans & Advances
Investments
Shareholders Funds
Profit before Tax
Profit after Tax
Return on Equity
2013GH¢ ‘000
156,835
123,201
82,103
39,868
18,406
2,998
2,294
12.5%
2014GH¢ ‘000
203,672
162,630
86,734
73,488
30,321
4,262
3,216
10.6%
2015GH¢ ‘000
328,406
243,261
101,597
139,857
70,933
9,468
8,240
11.6%
2016GH¢ ‘000
488,182
355,485
94,389
253,291
81,288
13,779
10,354
12.7%
2012GH¢ ‘000
104,730
89,935
57,627
25,045
9,302
2,561
1,781
19,1%
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FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
Strategic Focus and Outlook for 2016
The strategic focus of our Company in year 2016 was to achieve a ‘Quantum Leap’ in line with our ongoing New Dawn Strategy to improve efficiency, profitability and service delivery. This resulted in increased financial performance even in the midst of the economic challenges of the year 2016.
Our strategic focus for the year also entailed pursuing our branch expansion programme in order to improve our Company’s accessibility, footprints and market share. To this end, six (6) additional branches at Abossey Okai, Madina, Nima, Nungua, Koforidua and Techiman were commissioned. Our Ashaiman branch and Information Technology Department were also relocated to a spacious, ultra-modern facility in the vicinity.
Awards
Our institution was adjudged the 58th best company in the fifteenth edition of the prestigious Ghana Club 100 awards and emerged the ‘Best Non-Banking Financial Service’ during the 2016 Made in Ghana Products and Services Excellence Awards. Other recognitions received by uniCredit included the ‘African Company of the Year Award 2016’ at the African Business Leadership Awards, as well as the ‘Best Enterprise Award’ by the Europe Business Assembly. Of course and most importantly, we could not celebrate these awards without the support of our customers. Thank you for the support and loyalty you have shown to uniCredit.
Appreciation
On behalf of Management, I wish to express our sincere appreciation to our Shareholders and Board of Directors for their continuous support in the business. We are enormously grateful to them. Our earnest appreciation is also due our diligent, resilient staff without whom we could not have posted these results and especially our valued customers who continuously entrust us with their banking transactions. We pledge to remain focused on enhancing our service delivery to attain excellence as well as improving our internal processes to ensure optimal operations so that uniCredit remains the preferred financial institution in Ghana.
Thank you.
Samuel Sakyi-Hyde Chief Executive Officer
Profit Before Tax
2000
2012
2,561
4,262
2,988
9,468
13,779
2013 2014 2015 20160 0
4000
8000
6000
12000
14000
16000
10000
Profit after Tax
2000
2012
1,781
3,216
2,294
8,240
10,354
2013 2014 2015 20160 0
4000
8000
6000
12000
10000
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
10
DIRECTORSREPORTFOR THE YEAR ENDED31 DECEMBER 2016
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FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
12
The Directors have pleasure in submitting to the shareholders, the annual reports together with the financial statements of the company for the year ended 31 December, 2016 in accordance with the Companies Act, 1963 (Act 179) and the relevant sections of the Banking Act, 2004 (Act 673), as amended by the Banking (Amendment) Act, 2007 (Act 738) and the Non-Bank Financial Institution Act, 2008 (Act 774)
1. Results
2. Dividend
The directors do not recommend the payment of dividend for the year ended 31 December 2016 (2015: GH¢ Nil).
3. Principal Activities
The principal activities of the company was in accordance with its regulations and there was no change in the principal activities of the company during the year.
4. Auditors
In accordance with the Companies Act 1963, Act 179 (1963), Section 134(5), Messrs. Deloitte & Touche, Chartered Accountants will continue as auditors of the company.
5. Events after the Reporting Period
The Directors confirm that no matters have arisen since 31 December 2016, which affect the financial statements of the company for the year ended on that date.
Total incomeProfit before taxFrom which is deducted;Provision for estimated income tax expense ofProvision for national stabilisation levy ofLeaving a profit after tax ofWhich is to be added to the surplus brought forward of Leaving a balance ofFrom which is deducted transfer to statutory reserve fundAnd a transfer to regulatory credit risk reserve of And a transfer to stated capitalResulting in a balance to be carried forward on theIncome surplus account at December 31 of
2016GH¢
120,498,65513,779,182
(2,735,434)(688,959)
10,354,7896,468,034
16,822,823(5,177,395)(2,321,597)(5,240,019)
4,083,813
2015GH¢
76,870,6199,468,660
(754,326)(473,433)8,240,9013,774,985
12,015,886(4,120,451)(1,427,402)
-
6,468,034
ChairmanDate: 28th April, 2017
DirectorDate: 28th April, 2017
Directors’ Report
13
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
Statement of Directors’ Responsibilities
The directors are responsible for preparing financial statements for each financial year which give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that year. In preparing those financial statements the directors are required to:
• Select suitable accounting policies and then apply them consistently;
• Make judgments and estimates that are reasonable and prudent;
• State whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
• Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business
The directors are responsible for ensuring that the company keeps accounting records which disclose with reasonable accuracy, at any time, the financial position of the company and which enables them to ensure that the financial statements comply with the Companies Act, 1963 (Act 179) and the relevant sections of the Banking Act, 2004 (Act 673), as amended by the Banking (Amendment) Act, 2007 (Act 738) and Non-Bank Financial Institution Act, 2008 (Act 774).
They are also responsible for taking such steps as are reasonably open to them to safeguard the assets of the company and to prevent and detect fraud and other irregularities.
The above statement which should be read in conjunction with the statement of the auditors’ responsibilities set out on page 6 is made with a view to distinguishing for shareholders the respective responsibilities of the directors and the auditors, in relation to the financial statements.
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
14
Opinion
We have audited the accompanying financial statements of uniCredit Ghana Limited set out on pages 9 to 65 which comprise of statement of financial position as at 31 December 2016, the statement of profit or loss and other comprehensive income, statement of changes in equity, statement of cash flows for the year then ended, and the notes comprising a summary of significant accounting policies and other explanatory information.
In our opinion, the financial statements give a true and fair view of the financial position of uniCredit Ghana Limited as at 31 December 2016 and the financial performance and cash flows for the year then ended in accordance with the International Financial Reporting Standards, and in the manner required by the Companies Act, 1963 (Act 179), and the relevant sections of the Banking Act, 2004 (Act 673), as amended by the Banking (Amendment) Act, 2007 (Act 738) and Non-Bank Financial Institution Act,2008 (Act 774).
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the requirements of the International Federation of Accountants Code of Ethics for Professional Accountants (IFAC Code) as adopted by the Institute of Chartered Accountants Ghana (ICAG) and we have fulfilled our other ethical responsibilities in accordance with the IFAC Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Other Information
The directors are responsible for the other information. The other information comprises the Directors’ Report, which we obtained prior to the date of this auditor’s report and the annual report, which is expected to be made available to us after that date. The other information does not include the financial statements and auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Statements
The Directors are responsible for the preparation of financial statements that give a true and fair view in accordance with International Financial Reporting Standards, and in the manner required by the Companies Act, 1963 (Act 179), and the relevant sections of the Banking Act, 2004 (Act 673), as amended by the Banking (Amendment) Act, 2007 (Act 738) and Non-Bank Financial Institution Act,2008 (Act 774); and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Independent Auditors’ ReportTo the members of uniCredit Ghana Limited Report on the Audit of the Financial Statements
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FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
In preparing the financial statements, the directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit.
We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists relating to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the Company’s financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Independent Auditors’ Report (cont’d)
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
16
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities of the Company to express an opinion on the financial statements.
We are responsible for the direction, supervision and performance of the Company’s audit. We remain solely responsible for our audit opinion.
We communicate with the audit committee and the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the audit committee and directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the audit committee and/or to the directors, we determine those matters that were of most significance in the audit of the financial statements of the current year and are therefore the key audit matters.
We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the benefits derivable by the public from such communication.
Report on Other Legal and Regulatory Requirements
The Companies Act, 1963 (Act 179) requires that in carrying out our audit work we consider and report on the following matters. We confirm that:
i. We have obtained all the information and explanation which to the best of our knowledge and belief were necessary for the purpose of our audit.
ii. The Company have kept proper books of account, so far as appears from our examination of those books.
iii. The Company’s financial position and its statement of profit or loss and other comprehensive income are in agreement with the books of account and returns.
The Non-Bank Financial Institution Act, 2008 (Act 774) section 23 and the Banking Act 2004 (Act 673), section 78 (2), requires that we state certain matters in our report
We hereby state that: i. The accounts give a true and fair view of the state of affairs of the Company and its results for the period under review.
Independent Auditors’ Report (cont’d)
17
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
ii. We were able to obtain all the information and explanation required for the efficient performance of our duties as auditors.
iii. The Company’s transactions were within its authorised powers.
The engagement partner on the audit resulting in this independent auditor’s report is:
Kwame Ampim-Darko (ICAG/P/1453)
For and on behalf of Deloitte & Touche (ICAG/F/2017/129)Chartered Accountants4 Liberation RoadAccra Ghana
28th April, 2017
Independent Auditors’ Report (cont’d)
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
18
Interest incomeInterest expense
Net interest income
Fees and commission incomeOther operation income
Operating income
Operating expenses
Operating Profit before charge for credit impairment loss
Credit impairment loss
Profit before taxation
TaxationNational fiscal stabilization levy
Profit for the year
Other comprehensive income
Total comprehensive income
2016 GH¢
120,498,655(55,837,759)
64,660,896
7,821,76332,710
72,515,369
(55,058,280)
17,457,088
(3,677,906)
13,779,182
(2,735,434)(688,959)
10,354,789
-
10,354,789
2015 GH¢
76,870,619(32,421,243)
44,449,376
5,101,64257,157
49,608,175
(39,528,544)
10,079,631
(610,971)
9,468,660
(754,326)(473,433)
8,240,901
-
8,240,901
Note
56
78
9
11
12a12d
Statement of Profit or Loss and other comprehensive Income
The accompanying notes form an integral part of these financial statements
19
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
AssetCash & bank balances Held-to maturity financial assetsLoans & advances to customersOther assetsProperty, plant and EquipmentIntangible assetsDeferred tax assetCurrent tax asset
Total assets
LiabilitiesCustomer depositsOther liabilitiesCurrent tax liabilityNational fiscal stabilisation levyDeferred tax liability
Total liabilities
Stated CapitalCapital SurplusStatutory Reserve FundsRegulatory Credit Risk ReserveIncome Surplus
Total shareholders’ funds
Total liabilities and shareholders’ funds
2016 GH¢
34,863,716253,291,673
94,388,93067,904,67636,629,779
946,928156,307
-
488,182,009
355,485,45450,233,578
903,457270,985 -
406,893,474
55,102,0005,309,447
12,162,4624,630,8144,083,813
81,288,535
488,182,009
2015 GH¢
25,300,195139,857,355101,597,730
35,302,81824,851,581 1,232,105
- 264,333
328,406,117
243,261,89213,560,998
- 282,459
367,024
257,472,372
49,861,9815,309,4476,985,0672,309,217
6,468,034
70,933,745
328,406,117
Note
131415161718
12e12c
192012c12d12e
2122232425
Statement of Financial PositionAs at 31 DECEMBER
The accompanying notes form an integral part of these financial statements
ChairmanDate: 28th April, 2017
DirectorDate: 28th April, 2017
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
20
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21
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
Cash Flows from Operating ActivitiesProfit before tax
Adjustment for:Depreciation and amortisationCharge for Credit ImpairmentInterest in SuspenseProfit/Loss on Disposal of Fixed Assets
Operating Profit before Working Capital Changes
Changes in held-to-maturity financial assetsChange in advancesChange in other assetsChange in Customer DepositsChange in other liabilities(Excluding borrowings)Cash from Operating ActivitiesTax PaidNet Cash from Operating Activities
Cash Flows from Investing ActivitiesPurchase of Property, Plant & EquipmentPurchase of intangible assetsProceeds from sale of Property & EquipmentNet Cash used in Investing Activities
Cash flows from financing activitiesChanges in borrowingsIncrease Stated CapitalNet Cash from Financing Activities
Net Increase in cash and Cash EquivalentsCash & Cash Equivalents at Beginning of yearCash & Cash Equivalents at end of period
Cash and Cash EquivalentCash in handBank balance
2016 GH¢
13,779,182
3,921,4663,677,9066,417,766 (32,710)
27,763,610
(113,434,318)(2,886,871)
(32,601,858)112,223,562
13,649,3034,713,428
(2,791,408)1,922,020
(15,230,997)(246,677)
95,897(15,381,776)
23,023,276 -
23,023,276
9,563,52125,300,19534,863,716
15,029,45919,834,25734,863,716
2015 GH¢
9,468,660
1,608,086 610,971
7,299,843 (57,157)
18,930,403
(66,368,965)(22,773,702)(13,875,823)
80,631,527 3,937,942
481,382 (1,939,669)(1,458,287)
(12,496,954)(1,407,682) 385,756
(13,518,880)
-32,371,00032,371,000
17,393,833 7,906,362
25,300,195
8,594,621 16,705,57425,300,195
Note
Statement of Cash Flows
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
22
1. Reporting Entity
uniCredit Ghana Limited was incorporated as a limited liability company and domiciled in Ghana under the Company’s Act of 1963 (Act 179) in 1995. It was granted a license to operate as a financial institution in 1984 in accordance with the Banking Law of 1989 (PNDC Law 225).
uniCredit Ghana Limited is a non-bank financial institution which has been in operation since 1995. The Institution was formerly called Kantamanto Savings and Loans Co. Ltd, but had a change of name in June 2007. The ownership of the Institution changed in April 2005. The Institution is headquartered at No. 3 North Ridge Lane, North Ridge, Accra.
The primary focus of uniCredit is to provide financial services that are specifically tailored to the needs of personal customers and micro, small and medium scale enterprises.
2. Summary of Significant Accounting Policies
The significant accounting policies adopted by uniCredit Ghana Limited under the International Financial Reporting Standards (IFRSs) are set out below:
2.1 Statement of Compliance
The financial statements of the Institution have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
2.2 Basis of Preparation
The financial statements have been prepared on a historical cost basis, except for the following material items in the statement of financial position:
• Assets and liabilities held for trading are measured at fair value;
• Financial instruments designated at fair value through profit or loss are measured at fair value;
• Investments in equity instruments are measured at fair value; • Other financial assets not held in a business model whose objective is to hold assets to collect contractual cash flows or whose contractual terms do not give rise solely to payments of principal and interest are measured at fair value; and
• Available-for-sale financial assets are measured at fair value.
Functional and Presentation Currency
These financial statements are presented in Ghana cedi, which is the Institution’s functional currency. Except as otherwise indicated, financial information presented in Ghana cedi has been rounded to the nearest one Ghana cedi.
Notes to the Financial Statement
23
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
Preparation of the Financial Statements
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company’s accounting policies. Changes in assumptions may have a significant impact on the financial statements in the period the assumptions changed. Management believes that the underlying assumptions are appropriate. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 4.
Income and Statement of Cash Flows
The Company has elected to present a single statement of profit or loss and other comprehensive income and presents its expenses by function of expense method.
The Company reports cash flows from operating activities using the indirect method. Interest received is presented within investing cash flows; interest paid is presented within operating cash flows.
The Principal Accounting Policies are set out Below:
2.3 Revenue Recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Institution and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duty. The Institution assesses its revenue arrangements against specific criteria in order to determine if it is acting as principal or agent. The Institution has concluded that it is acting as a principal in all of its revenue arrangements. The following specific recognition criteria must also be met before revenue is recognised:
Our revenues are primarily derived from the following sources: (1) interest income on loans issued to clients; (2) commission and fees on providing financial advisory services: and (3) other revenues which are ancillary to our operations. Generally, revenues are recognised when the services have been rendered. The following is a description of the composition of our revenues: Interest
Interest income and expense are recognised in profit or loss using the effective interest method. The effective interest rate is the rate that exactly discounts the estimated future cash payments and receipts through the expected life of the financial asset or liability (or, where appropriate, a shorter period) to the carrying amount of the financial asset or liability. When calculating the effective interest rate, the Institution estimates future cash flows considering all contractual terms of the financial instrument, but not future credit losses. The calculation of the effective interest rate includes all transaction costs and fees and points paid or received that are an integral part of the effective interest rate. Transaction costs include incremental costs that are directly attributable to the acquisition or issue of a financial asset or liability.
Notes to the Financial Statement (cont’d)
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
24
Interest Income and Expense Presented in the Statement of Comprehensive Income Include:
• Interest on financial assets and financial liabilities measured at amortised cost calculated on an effective interest basis;
• The effective portion of fair value changes in qualifying hedging derivatives designated in cash flow hedges of variability in interest cash flows, in the same period that the hedged cash flows affect interest income/expense;
• The ineffective portion of fair value changes in qualifying hedging derivatives designated in cash flow hedges of interest rate risk; and
• Fair value changes in qualifying derivatives, including hedge ineffectiveness, and related
Interest income and expense on all trading assets and liabilities are considered to be incidental to the Company’s operations and are presented together with all other changes in the fair value of trading assets and liabilities in net trading income.
Commission and Fees
Fees and commission income and expense that are integral to the effective interest rate on a financial asset or liability are included in the measurement of the effective interest rate. Other fees and commission income, including account servicing fees, investment management fees, sales commission, placement fees and syndication fees, are recognised as the related services are performed. When a loan commitment is not expected to result in the draw-down of a loan, the related loan commitment fees are recognised on a straight-line basis over the commitment period. Other fees and commission expense relate mainly to transaction and service fees, which are expensed as the services are received.
Net Trading Income
Net trading income comprises gains less losses related to trading assets and liabilities, and includes all realised and unrealised fair value changes, interest, dividends and foreign exchange differences.
Net income from other financial instruments at fair value through profit or loss
Net income from other financial instruments at fair value through profit or loss relates to non-trading derivatives held for risk management purposes that do not form part of qualifying hedge relationships, financial assets mandatorily measured at fair value through profit or loss other than those held for trading, and financial assets and liabilities designated at fair value through profit or loss. It includes all realised and unrealised fair value changes, interest, dividends and foreign exchange differences.
Dividends
Revenue is recognised when the Institution’s right to receive the payment is established.
Notes to the Financial Statement (cont’d)
25
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
2.4 Taxes
Current Income Tax
Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are enacted or substantively enacted, at the reporting date in the countries where the Institution operates and generates taxable income.
Current income tax relating to items recognised directly in equity is recognised in equity and not in the statement of profit or loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Deferred Tax
Deferred tax is provided using the liability method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax liabilities are recognised for all taxable temporary differences, except:
• Where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss
• In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future
Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except:
• Where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss
• In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Notes to the Financial Statement (cont’d)
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
26
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority. Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate recognition at that date, would be recognised subsequently if new information about facts and circumstances changed. The adjustment would either be treated as a reduction to goodwill (as long as it does not exceed goodwill) if it is incurred during the measurement period or in profit or loss.
Value added tax and National Health Insurance Levy (VAT & NHIL)
Revenues, Expenses and Assets are Recognised net of the Amount of VAT & NHIL, Except:
• Where the taxes and levies incurred on a purchase of assets or services are not recoverable from the taxation authority, in which case the taxes are recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable
• Receivables and payables are stated with the amount of taxes and levies include the net amount of taxes and levies recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position.
2.5 Non-Current Assets held for Sale and Discontinued Operations
Non-current assets and disposal Companies classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell. Non-current assets and disposal Companies are classified as held for sale if their carrying amounts will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset or disposal Institution is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.
Property, plant and equipment and intangible assets once classified as held for sale are not depreciated or amortised.
2.6 Property, Plant and Equipment
Property, plant and equipment is stated at cost, net of accumulated depreciation and/or accumulated impairment losses, if any. Such cost includes the cost of replacing component parts of the property, plant and equipment and borrowing costs for long-term construction projects if the recognition criteria are met.
When significant parts of property, plant and equipment are required to be replaced at intervals, the Institution derecognises the replaced part, and recognises the new part with its own associated useful life and depreciation. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in the statement of profit or loss as incurred. The present value of the expected cost for the decommissioning of the asset after its use is included in the cost of the respective asset if the recognition criteria for a provision are met.
Notes to the Financial Statement (cont’d)
27
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
Land and buildings are measured at cost less accumulated depreciation on buildings and impairment losses recognised. Valuations are performed with sufficient frequency to ensure that the fair value of a revalued asset does not differ materially from its carrying amount.
Any revaluation surplus is recognised in other comprehensive income and accumulated in equity in the asset revaluation reserve, except to the extent that it reverses a revaluation decrease of the same asset previously recognised in the statement of profit or loss, in which case the increase is recognised in the statement of profit or loss. A revaluation deficit is recognised in the statement of profit or loss, except to the extent that it offsets an existing surplus on the same asset recognised in the asset revaluation reserve.
Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets as follows:
Freehold land Nil Buildings 2% Improvement on rented premises 20% Plant and machinery 20% Motor vehicles 20% Computers 33.33% Office equipment 20% Furniture and fittings 20%
An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit or loss when the asset is derecognised. The assets’ residual values, useful lives and methods of depreciation are reviewed at each financial year end and adjusted prospectively, if appropriate.
2.7 Leases
The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at the inception date, whether fulfillment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset, even if that right is not explicitly specified in an arrangement. For arrangements entered into prior to 1 January 2011, the date of inception is deemed to be 1 January 2011 in accordance with the IFRS 1.
The Institution as a lessee
Finance leases which transfer to the Institution substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the commencement of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised in finance costs in the statement of profit or loss.
A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Institution will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.
Operating lease payments are recognised as an operating expense in the statement of profit or loss on a straight-line basis over the lease term.
Notes to the Financial Statement (cont’d)
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
28
The Institution as a Lessor
Leases in which the Institution does not transfer substantially all the risks and benefits of ownership of the asset are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same bases as rental income. Contingent rents are recognised as revenue in the period in which they are earned.
2.8 Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective assets. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.
2.9 Investment Properties
Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at fair value, which reflects market conditions at the reporting date. Gains or losses arising from changes in the fair values of investment properties are included in the statement of profit or loss in the period in which they arise. Fair values are evaluated annually by an accredited external, independent valuer, applying a valuation model recommended by the International Valuation Standards Committee.
Investment properties are derecognised when either they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognised in the statement of profit or loss in the period of derecognition. Transfers are made to or from investment property only when there is a change in use. For a transfer from investment property to owner-occupied property, the deemed cost for subsequent accounting is the fair value at the date of change. If owner-occupied property becomes an investment property, the Institution accounts for such property in accordance with the policy stated under property, plant and equipment up to the date of change.
2.10 Intangible Assets
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses, if any. Internally generated intangible assets, excluding capitalised development costs, are not capitalised and expenditure is reflected in the statement of profit or loss in the year in which the expenditure is incurred.
The useful lives of Intangible Assets are Assessed as either Finite or Indefinite.
Intangible assets with finite lives are amortised over their useful economic lives and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life is reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the statement of profit or loss in the expense category consistent with the function of the intangible assets.
Notes to the Financial Statement (cont’d)
29
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis. Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit or loss when the asset is derecognised.
2.11 Financial Instruments - Initial Recognition and subsequent Measurement
i. Financial Assets
Initial Recognition and Measurement
Financial assets within the scope of IAS 39 are classified as financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, available-for-sale financial assets, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. The Institution determines the classification of its financial assets at initial recognition.
All financial assets are recognised initially at fair value plus, in the case of assets not at fair value through profit or loss, directly attributable transaction costs.
Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the marketplace (regular way trades) are recognised on the trade date, i.e., the date that the Institution commits to purchase or sell the asset.
The Institution’s financial assets include cash and short-term deposits, trade and other receivables, loans and other receivables, quoted and unquoted financial instruments and derivative financial instruments.
Subsequent Measurement
The subsequent measurement of financial assets depends on their classification as follows:
Financial Assets at Fair Value Through Profit or Loss
Financial assets at fair value through profit or loss include financial assets held for trading and financial assets designated upon initial recognition at fair value through profit or loss. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. This category includes derivative financial instruments entered into by the Institution that are not designated as hedging instruments in hedge relationships as defined by IAS 39. Derivatives, including separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Financial assets at fair value through profit and loss are carried in the statement of financial position at fair value with changes in fair value recognised in finance income or finance costs in the statement of profit or loss.
The Institution has not designated any financial assets upon initial recognition as at fair value through profit or loss.
The Institution evaluates its financial assets held for trading, other than derivatives, to determine whether the intention to sell them in the near term is still appropriate. When the Institution is unable to trade these financial assets due to inactive markets and management’s intention to sell them in the foreseeable future significantly changes, the Institution may elect to reclassify these financial assets in rare circumstances. The reclassification to loans and receivables, available-for-sale or held to maturity depends on the nature of the asset. This evaluation does not affect any financial assets designated at fair value through profit or loss using the fair value option at designation.
Notes to the Financial Statement (cont’d)
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
30
Derivatives embedded in host contracts are accounted for as separate derivatives and recorded at fair value if their economic characteristics and risks are not closely related to those of the host contracts and the host contracts are not held for trading or designated at fair value though profit or loss. These embedded derivatives are measured at fair value with changes in fair value recognised in the statement of profit or loss. Reassessment only occurs if there is a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required.
Loans and Receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate method (EIR), less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the statement of profit or loss. The losses arising from impairment are recognised in the statement of profit or loss in finance costs.
Held-to-Maturity Investments
Non-derivative financial assets with fixed or determinable payments and fixed maturities are classified as held-to-maturity when the Institution has the positive intention and ability to hold them to maturity. After initial measurement, held-to-maturity investments are measured at amortised cost using the effective interest method, less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the statement of profit or loss. The losses arising from impairment are recognised in the statement of profit or loss in finance costs.
Available-for-Sale Financial Investments
Available-for-sale financial investments include equity and debt securities. Equity investments classified as available-for-sale are those, which are neither classified as held for trading nor designated at fair value through profit or loss. Debt securities in this category are those which are intended to be held for an indefinite period of time and which may be sold in response to needs for liquidity or in response to changes in the market conditions.
After initial measurement, available-for-sale financial investments are subsequently measured at fair value with unrealised gains or losses recognised as other comprehensive income in the available-for-sale reserve until the investment is derecognised, at which time the cumulative gain or loss is recognised in other operating income, or determined to be impaired, at which time the cumulative loss is reclassified to the statement of profit or loss in finance costs and removed from the available-for-sale reserve. Interest income on available-for-sale debt securities is calculated using the effective interest method and is recognised in profit or loss.
The Institution evaluates its available-for-sale financial assets to determine whether the ability and intention to sell them in the near term is still appropriate. When the Institution is unable to trade these financial assets due to inactive markets and management’s intention to do so significantly changes in the foreseeable future, the Institution may elect to reclassify these financial assets in rare circumstances. Reclassification to loans and receivables is permitted when the financial assets meet the definition of loans and receivables and the Institution has the intent and ability to hold these assets for the foreseeable future or until maturity. Reclassification to the held-to-maturity category is permitted only when the entity has the ability and intention to hold the financial asset accordingly.
For a financial asset reclassified out of the available-for-sale category, any previous gain or loss on that asset that has been recognised in equity is amortised to profit or loss over the remaining life of the investment using the EIR. Any difference
Notes to the Financial Statement (cont’d)
31
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
between the new amortised cost and the expected cash flows is also amortised over the remaining life of the asset using the EIR. If the asset is subsequently determined to be impaired, then the amount recorded in equity is reclassified to the statement of profit or loss.
Derecognition
A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognised when:
• The rights to receive cash flows from the asset have expired
• The Institution has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Institution has transferred substantially all the risks and rewards of the asset, or (b) the Institution has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Institution has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, and has neither transferred nor retained substantially all of the risks and rewards of the asset nor transferred control of it, the asset is recognised to the extent of the Institution’s continuing involvement in it.
In that case, the Institution also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Institution has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Institution could be required to repay.
ii. Impairment of Financial Assets
The Institution assesses at each reporting date whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred ‘loss event’) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.
Financial Assets Carried at Amortised Cost
For financial assets carried at amortised cost, the Institution first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Institution determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognised are not included in a collective assessment of impairment.
Notes to the Financial Statement (cont’d)
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
32
If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between the assets carrying amount and the present value of estimated future cash flows (excluding future expected credit losses that have not yet been incurred). The present value of the estimated future cash flows is discounted at the financial asset’s original effective interest rate. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate.
The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in the statement of profit or loss. Interest income continues to be accrued on the reduced carrying amount and is accrued using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. The interest income is recorded as part of finance income in the statement of profit or loss. Loans together with the associated allowance are written off when there is no realistic prospect of future recovery and all collateral has been realised or has been transferred to the Institution. If, in a subsequent year, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognised, the previously recognised impairment loss is increased or reduced by adjusting the allowance account. If a future write-off is later recovered, the recovery is credited to finance costs in the statement of profit or loss
Available-for-Sale Financial Investments
For available-for-sale financial investments, the Institution assesses at each reporting date whether there is objective evidence that an investment or a group of investments is impaired.
In the case of equity investments classified as available-for-sale, objective evidence would include a significant or prolonged decline in the fair value of the investment below its cost. ‘Significant’ is evaluated against the original cost of the investment and ‘prolonged’ against the period in which the fair value has been below its original cost. Where there is evidence of impairment, the cumulative loss - measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that investment previously recognised in the statement of profit or loss — is removed from other comprehensive income and recognised in the statement of profit or loss. Impairment losses on equity investments are not reversed through the statement of profit or loss; increases in their fair value after impairments are recognised directly in other comprehensive income.
In the case of debt instruments classified as available-for-sale, impairment is assessed based on the same criteria as financial assets carried at amortised cost. However, the amount recorded for impairment is the cumulative loss measured as the difference between the amortised cost and the current fair value, less any impairment loss on that investment previously recognised in the statement of profit or loss.
Future interest income continues to be accrued based on the reduced carrying amount of the asset, using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. The interest income is recorded as part of finance income. If, in a subsequent year, the fair value of a debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in the statement of profit or loss, the impairment loss is reversed through the statement of profit or loss.
iii. Financial Liabilities
Initial Recognition and Measurement
Financial liabilities within the scope of IAS 39 are classified as financial liabilities at fair value through profit or loss, loans and borrowings, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. The Institution determines the classification of its financial liabilities at initial recognition.
Notes to the Financial Statement (cont’d)
33
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings, carried at amortised cost. This includes directly attributable transaction costs.
The Institution’s financial liabilities include trade and other payables, bank overdrafts, loans and borrowings, financial guarantee contracts, and derivative financial instruments.
Subsequent Measurement
The measurement of financial liabilities depends on their classification as follows:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are acquired for the purpose of selling in the near term. This category includes derivative financial instruments entered into by the Institution that are not designated as hedging instruments in hedge relationships as defined by IAS 39. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments.
Gains or losses on liabilities held for trading are recognised in the statement of profit or loss.
The Institution has not designated any financial liabilities upon initial recognition as at fair value through profit or loss.
Loans and Borrowings
After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in the statement of profit or loss when the liabilities are derecognised as well as through the effective interest rate method (EIR) amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance costs in the statement of profit or loss.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in the statement of profit or loss. iv. Offsetting of Financial Instruments
Financial assets and financial liabilities are offset and the net amount reported in the statement of financial position if, and only if, there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.
Notes to the Financial Statement (cont’d)
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
34
v. Fair Value of Financial Instruments
The fair value of financial instruments that are traded in active markets at each reporting date is determined by reference to quoted market prices or dealer price quotations (bid price for long positions and ask price for short positions), without any deduction for transaction costs.
For financial instruments not traded in an active market, the fair value is determined using appropriate valuation techniques. Such techniques may include using recent arm’s length market transactions; reference to the current fair value of another instrument that is substantially the same; a discounted cash flow analysis or other valuation models.
2.12 Inventories
Inventories are valued at the lower of cost and net realisable value.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.
2.13 Impairment of Non-Financial Assets
The Institution assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Institution estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (CGU) fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or Institution’s of assets.
Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded subsidiaries or other available fair value indicators.
The Institution bases its impairment calculation on detailed budgets and forecast calculations which are prepared separately for each of the Institution’s cash-generating units to which the individual assets are allocated. These budgets and forecast calculations are generally covering a period of five years. For longer periods, a long term growth rate is calculated and applied to project future cash flows after the fifth year.
Impairment losses of continuing operations, including impairment on inventories, are recognised in the statement of profit or loss in those expense categories consistent with the function of the impaired asset, except for a property previously revalued where the revaluation was taken to other comprehensive income. In this case, the impairment is also recognised in other comprehensive income up to the amount of any previous revaluation.
For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the Institution estimates the asset’s or cash-generating unit’s recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognised.
Notes to the Financial Statement (cont’d)
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FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the statement of profit or loss unless the asset is carried at a revalued amount, in which case the reversal is treated as a revaluation increase.
Intangible Assets
Intangible assets with indefinite useful lives are tested for impairment annually as at 31 December either individually or at the cash-generating unit level, as appropriate and when circumstances indicate that the carrying value may be impaired.
2.14 Cash and Short-Term Deposits
Cash and short-term deposits in the statement of financial position comprise cash at banks and on hand and short-term deposits with a maturity of three months or less.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits as defined above, net of outstanding bank overdrafts.
2.15 Translation of Foreign Currencies
The Institution’s functional currency is the Ghana Cedi. In preparing the statement of financial position of the Institution, transactions in currencies other than Ghana Cedis are recorded at the rates of exchange prevailing on the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at the end of the reporting period. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in the statement of comprehensive income. Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in the statement of comprehensive income for the period except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised directly in shareholders’ equity. For such non-monetary items, any exchange component of that gain or loss is also recognised directly in the shareholders’ equity.
2.16 Provisions
General
Provisions are recognised when the Institution has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Institution expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of profit or loss net of any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
Notes to the Financial Statement (cont’d)
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
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Restructuring provisions
Restructuring provisions are only recognised when general recognition criteria for provisions are fulfilled. Additionally, the Institution needs to have in place a detailed formal plan about the business or part of the business concerned, the location and number of employees affected, a detailed estimate of the associated costs and appropriate time-line. The people affected have a valid expectation that the restructuring is being carried out or the implementation has been initiated already.
2.17 Employee Benefits
• Defined Contribution Plans
Defined contribution plans are post-employment benefit plans under which the Institution pays fixed contributions into a separate fund and has no legal or contractual obligation to pay further contributions if the fund does not hold sufficient asset to pay all employee benefits relating to employee service in the current and prior periods. Obligation for contributions to defined contribution plans are recognised as an expense in the statement of comprehensive income when they are due.
• Short-Term Benefits
Short-term employee benefits are amount payable to employees that fall due wholly within twelve months after the end of the period in which the employee renders the related service.
The cost of short-term employee benefits are recognised as an expense in the period when the economic benefit is given, as an employment cost. Unpaid short-term employee benefits as at the end of the accounting period are recognised as an accrued expense and any short-term benefit paid in advance are recognised as prepayment to the extent that it will lead to a future cash refund a reduction in future cash payment.Wages and salaries payable to employees are recognised as an expense in the statement of comprehensive income at gross. The Institution’s contribution to social security fund is also charged as an expense.
• Termination Benefits
Termination benefits are recognised as an expense when the Institution is demonstrably committed, without realistic possibility of withdrawal, to a formal detailed plan to terminate employment before the normal retirement date. Termination benefits for voluntary redundancies are recognised if the Institution has made an offer encouraging voluntary redundancy, it is probable that the offer will be accepted, and the number of acceptance can be estimated reliably.
2.18 Events after the Reporting Period
The Institution adjusts the amounts recognised in its financial statements to reflect events that provide evidence of conditions that existed at the end of the reporting period.
Where there are material events that are indicative of conditions that arose after the reporting period, the Institution discloses, by way of note, the nature of the event and the estimate of its financial effect, or a statement that such an estimate cannot be made.
Notes to the Financial Statement (cont’d)
37
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
2.19 Stated Capital
Stated capital is classified as equity when there is no obligation to transfer cash or other assets. Incremental costs directly attributable to the issue of equity instruments are shown in equity as a deduction from the proceeds, net of tax. Incremental costs directly attributable to the issue of equity instruments as consideration for the acquisition of a business are included in the cost of acquisition. 3. Application of New and Revised Standards, Amendments and Interpretations
During the year, there were certain amendments and revisions to some of the standards. The nature and the impact of each new standard and amendments are described below. The company intends to adopt these standards, if applicable, when they become effective.
Standards were in issue, but not yet effective
IFRS 9 Financial InstrumentsClassification and Measurement of Financial Assets
On 24 July 2014, the IASB issued the final version of IFRS 9 Financial Instruments incorporating a new expected loss impairment model and introducing limited amendments to the classification and measurement requirements for financial assets. This version supersedes all previous versions and is mandatorily effective for periods beginning on or after 1 January 2018 with early adoption permitted (subject to local endorsement requirements). For a limited period, previous versions of IFRS 9 may be adopted early if not already done so provided the relevant date of initial application is before 1 February 2015.
IFRS 9 uses a single approach to determine classification of financial assets (which will then determine their measurement basis either at amortised cost or fair value, replacing the many different rules in IAS 39). The approach is based on how an entity manages its financial assets (“business model”) and the contractual cash flow characteristics of such assets (“contractual cash flows”). The business model criterion is met when an entity holds financial assets in order to collect the asset’s cash flows. The contractual cash flows criterion is met when the contractual cash flows collected from the financial asset represent solely interest and principal.
When the two criteria are met, the financial asset must be measured at amortised cost unless the fair value designation is adopted. This assessment does not need to be performed on an asset by asset business but rather on a portfolio basis. A new measurement category of fair value through other comprehensive income will apply for debt instruments held within a business model whose objective is achieved by collecting contractual cash flows and selling financial assets.
Classification and Measurement of Financial Liabilities
The classification criteria for financial liabilities contained in IAS 39 move to IFRS 9 unchanged and the IAS 39 classification categories of amortised cost and fair value through profit or loss are retained. For a financial liability designated as at fair value through profit or loss using the fair value option, the change in the liability’s fair value attributable to changes in the liability’s credit risk is recognised directly in other comprehensive income, unless it creates or increases an accounting mismatch.
The amount that is recognised in other comprehensive income is not recycled when the liability is settled or extinguished. The meaning of credit risk is clarified to distinguish credit risk from asset-specific performance risk. The cost exemption in IAS 39 for derivative liabilities is eliminated, although the concept of bifurcating embedded derivatives from a financial liability host contract remains unchanged from IAS 39.
Notes to the Financial Statement (cont’d)
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
38
Embedded Derivatives
The embedded derivative concept that existed in IAS 39 has been included in IFRS 9 to apply only to hosts that are not financial assets within the scope of the Standard. Consequently, embedded derivatives that under IAS 39 would have been separately accounted for at FVTPL because they were not closely related to the host financial asset will no longer be separated. Instead, the contractual cash flows of the financial asset are assessed in their entirety, and the asset as a whole is measured at FVTPL if the contractual cash flow characteristics test is not passed
Derecognition
In October 2010 the requirements in IAS 39 relating to derecognition of financial assets and financial liabilities were carried forward unchanged to IFRS 9.
Hedging
The hedge accounting requirements in IFRS 9 are optional. If certain eligibility and qualification criteria are met, hedge accounting allows an entity to reflect risk management activities in the financial statements by matching gains or losses on financial hedging instruments with losses or gains on the risk exposures they hedge.
The three types of hedge accounting remain: cash flow hedges, fair value hedges and net investment hedges. IFRS 9 allows combinations of derivatives and non-derivatives to be designated as the hedging instrument. There has been a broadening of the types of risks that may be hedged, especially for non-financial items. Risk components of non-financial items may now be hedged under IFRS 9. Changes in the way forward contracts and derivative options are accounted for when they are in a hedge accounting relationship will reduce profit or loss volatility when compared with IAS 39. The effectiveness test has been overhauled and replaced with the principle of an economic relationship. Retrospective assessment of hedge effectiveness is no longer required. The new requirements do bring with more extensive hedge documentation and disclosure for entities.
The hedge accounting model in IFRS 9 is not designed to accommodate hedging of open, dynamic portfolios. As a result, for a fair value hedge of interest rate risk of a portfolio of financial assets or liabilities an entity can apply the hedge accounting requirements in IAS 39 instead of those in IFRS 9. In addition when an entity first applies IFRS 9, it may choose as its accounting policy choice to continue to apply the hedge accounting requirements of IAS 39 instead of the requirements of Chapter 6 of IFRS 9.
Impairment
A new impairment model based on expected credit losses will apply to debt instruments measured at amortised cost or at fair value through other comprehensive income, lease receivables, contract assets and certain written loan commitments and financial guarantee contracts. The loss allowance will be for either 12 month expected credit losses or lifetime expected credit losses. The latter applies if credit risk has increased significantly since initial recognition of the financial instrument. A different approach applies for purchased or originated credit impaired financial assets.
IFRS 14 Regulatory Deferral Accounts
IFRS 14 Regulatory Deferral Accounts permits an entity which is a first-time adopter of International Financial Reporting Standards to continue to account, with some limited changes, for ‘regulatory deferral account balances’ in accordance with its previous GAAP, both on initial adoption of IFRS and in subsequent financial statements. Regulatory deferral account balances, and movements in them, are presented separately in the statement of financial position and statement of profit or loss and other comprehensive income, and specific disclosures are required.
Notes to the Financial Statement (cont’d)
39
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
IFRS 15 Revenue from Contracts with Customers
IFRS 15 specifies how and when an IFRS reporter will recognise revenue as well as requiring such entities to provide users of financial statements with more informative, relevant disclosures. The standard provides a single, principles based five-step model to be applied to all contracts with customers. The core principle of IFRS 15 is that an entity will recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
This Core Principle is Delivered in a Five-Step Model Framework:
• Identify the contract(s) with a customer
• Identify the performance obligations in the contract
• Determine the transaction price
• Allocate the transaction price to the performance obligations in the contract
• Recognise revenue when (or as) the entity satisfies a performance obligation.
Application of this guidance will depend on the facts and circumstances present in a contract with a customer and will require the exercise of judgment.
IFRS 16 Leases
IFRS 16 specifies how an IFRS reporter will recognise, measure, present and disclose leases. The standard provides a single lessee accounting model, requiring lessees to recognise assets and liabilities for all leases unless the lease term is 12 months or less or the underlying asset has a low value. Lessors continue to classify leases as operating or finance, with IFRS 16’s approach to lessor accounting substantially unchanged from its predecessor, IAS 17. IFRIC 22 Foreign Currency Transactions and Advance Consideration
IFRIC 22 clarifies the accounting for transactions that include the receipt or payment of advance consideration in a foreign currency.
The Interpretation covers foreign currency transactions when an entity recognises a non-monetary asset or non-monetary liability arising from the payment or receipt of advance consideration before the entity recognises the related asset, expense or income. It does not apply when an entity measures the related asset, expense or income on initial recognition at fair value or at the fair value of the consideration received or payed at a date other than the date of initial recognition of the non-monetary asset or non-monetary liability. Also, the Interpretation need not be applied to income taxes, insurance contracts or reinsurance contracts. Consensus
• The date of the transaction, for the purpose of determining the exchange rate, is the date of initial recognition of the non-monetary prepayment asset or deferred income liability.
• If there are multiple payments or receipts in advance, a date of transaction is established for each payment or receipt.
Notes to the Financial Statement (cont’d)
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
40
Amendments to Standards and interpretations
IFRS 2 Share - Based Payments The IASB Finalised three Separate Amendments to IFRS 2:
Effects of vesting conditions on the measurement of a cash-settled share-based paymentUntil now, IFRS 2 contained no guidance on how vesting conditions affect the fair value of liabilities for cash-settled share-based payments. IASB has now added guidance that introduces accounting requirements for cash-settled share-based payments that follows the same approach as used for equity-settled share-based payments.
Accounting for a modification to the terms and conditions of a share-based payment that changes the classification of the transaction from cash-settled to equity-settled
Until now, IFRS 2 did not specifically address situations where a cash-settled share-based payment changes to an equity-settled share-based payment because of modifications of the terms and conditions. The IASB has introduced the following clarifications:
• On such modifications, the original liability recognised in respect of the cash-settled share based payment is derecognised and the equity-settled share-based payment is recognised at the modification date fair value to the extent services have been rendered up to the modification date.
• Any difference between the carrying amount of the liability as at the modification date and the amount recognised in equity at the same date would be recognised in profit and loss immediately.
Classification of share-based payment transactions with net settlement featuresIASB has introduced an exception into IFRS 2 so that a share-based payment where the entity settles the share-based payment arrangement net is classified as equity-settled in its entirety provided the share-based payment would have been classified as equity-settled had it not included the net settlement feature.
IFRS 7 Financial Instrument: DisclosuresDisclosures about the Initial Application of IFRS 9
The following disclosures are required in the reporting period when IFRS 9 is first applied:
• Changes in the classifications of financial assets and financial liabilities; and
• Details of financial assets and financial liabilities which have been reclassified so that they are measured at amortised cost, including the fair value of the financial asset or liability at the end of the reporting period and the fair value gain or loss that would have been recognised in profit or loss during the reporting period if the financial asset had not been reclassified.
IFRS 10 Consolidated Financial StatementsInvestment Entities Exemption
Amends IFRS 10, IFRS 12 and IAS 27 to provide investment entities an exemption from the consolidation of particular subsidiaries and instead require that an investment entity measure the investment in each eligible subsidiary at fair value through profit or loss in accordance with IFRS 9 or IAS 39.
Notes to the Financial Statement (cont’d)
41
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture
The objective of the project is to address an acknowledged inconsistency between the requirements in IFRS 10 and those in IAS 28 (2011), in dealing with the sale or contribution of assets between an investor and its associate or joint venture. The main consequence of the amendments is that a full gain or loss is recognised when a transaction involves a business (whether it is housed in a subsidiary or not). A partial gain or loss is recognised when a transaction involves assets that do not constitute a business, even if these assets are housed in a subsidiary.
IFRS 11 Joint ArrangementsAccounting for Acquisitions of Interests in Joint Operations
The amendment addresses how a joint operator should account for the acquisition of an interest in a joint operation in which the activity of the joint operation constitutes a business. IFRS 11 now requires that such transactions shall be accounted for using the principles in IFRS 3 Business Combinations and other standards. The most significant impacts will be the recognition of goodwill and the recognition of deferred tax assets and liabilities. The amendments not apply to acquisitions of interests in joint operations but also when a business is contributed to a joint operation on its formation.
IFRS 12 Disclosure of Interests in Other InterestsInvestment Entities
This amendment clarifies which subsidiaries of an investment entity should be consolidated instead of being measured at fair value. The impact on whether the entities may be consolidated will result in changes in the disclosure requirements of IFRS 12 for subsidiaries.
IFRS 15 Revenue from Contracts with Customers
To keep the IASB and FASB informed on interpretive issues occurring during implementation of the converged revenue recognition standard and to assist in determining what action may be needed to resolve diversity in practice, the Boards created the Joint Transition Resource Group for Revenue Recognition (TRG).
The discussions of the TRG highlighted potential diversity in stakeholders’ understanding of some topics in IFRS 15. In response to this, the IASB made amendments to the following areas clarify IFRS 15:
• Distinct goods or services
• Principal versus agent
• Licensing
• Determining the nature of the entities promise
• Sales-based usage- based royalties
IAS 1 Presentation of Financial Statements
The narrow-focus amendments to IAS 1 clarify, rather than significantly change, existing IAS 1 requirements. In most cases the proposed amendments respond to overly prescriptive interpretations of the wording in IAS 1.
Notes to the Financial Statement (cont’d)
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
42
The amendments Relate to the Following:
• materiality;
• order of the notes;
• subtotals;
• accounting policies; and
• disaggregation
IAS 7 Statement of Cash Flows
The amendments come with the objective that entities shall provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities.
To achieve this objective, the IASB requires that the following changes in liabilities arising from financing activities are disclosed (to the extent necessary): (i) changes from financing cash flows; (ii) changes arising from obtaining or losing control of subsidiaries or other businesses; (iii) the effect of changes in foreign exchange rates; (iv) changes in fair values; and (v) other changes.
The IASB defines liabilities arising from financing activities as liabilities “for which cash flows were, or future cash flows will be, classified in the statement of cash flows as cash flows from financing activities”. It also stresses that the new disclosure requirements also relate to changes in financial assets if they meet the same definition.
The amendments state that one way to fulfil the new disclosure requirement is to provide a reconciliation between the opening and closing balances in the statement of financial position for liabilities arising from financing activities. This is a departure from the December 2014 exposure draft that had proposed that such a reconciliation should be required.
Finally, the amendments state that changes in liabilities arising from financing activities must be disclosed separately from changes in other assets and liabilities
IAS 12 Income Taxes
The amendments in Recognition of Deferred Tax Assets for Unrealised Losses clarify the following aspects:
• Unrealised losses on debt instruments measured at fair value and measured at cost for tax purposes give rise to a deductible temporary difference regardless of whether the debt instrument’s holder expects to recover the carrying amount of the debt instrument by sale or by use.
• The carrying amount of an asset does not limit the estimation of probable future taxable profits.
• Estimates for future taxable profits exclude tax deductions resulting from the reversal of deductible temporary differences.
Notes to the Financial Statement (cont’d)
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FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
• An entity assesses a deferred tax asset in combination with other deferred tax assets. Where tax law restricts the utilisation of tax losses, an entity would assess a deferred tax asset in combination with other deferred tax assets of the same type
IAS 16 Property, Plant and Equipment
Clarification of Acceptable Methods of Depreciation and Amortisation The amended IAS 16 introduces a rebuttable presumption that revenue is not an appropriate basis for amortisation of property, plant and equipment.
This Presumption can only be Rebutted in Two Limited Circumstances:
1. Property plant and equipment is expressed as a measure of revenue; or
2. Revenue and consumption of the item of property, plant and equipment are highly correlated.
Guidance is introduced to explain that expected future reductions in selling prices could be indicative of a reduction of the future economic benefits embodied in an asset.
IAS 27 Separate Financial StatementsEquity Method in Separate Financial Statements
The objective of this narrow-scope project is to restore the option to use the equity method of accounting in separate financial statements. IAS 27 Separate Financial Statements allows an entity to account for investments in subsidiaries, joint ventures and associates either at cost or in accordance with IFRS 9 Financial Instruments in the entity’s separate financial statements. IAS 28 Investments in Associates and Joint VenturesSale or Contribution of Assets between an Investor and its Associate or Joint Venture
The objective of the project is to address an acknowledged inconsistency between the requirements in IFRS 10 and those in IAS 28 (2011), in dealing with the sale or contribution of assets between an investor and its associate or joint venture. The main consequence of the amendments is that a full gain or loss is recognised when a transaction involves a business (whether it is housed in a subsidiary or not). A partial gain or loss is recognised when a transaction involves assets that do not constitute a business, even if these assets are housed in a subsidiary.
Sale or Contribution of Assets between an Investor and its Associate or Joint VentureThe objective of the project is to address an acknowledged inconsistency between the requirements in IFRS 10 and those in IAS 28 (2011), in dealing with the sale or contribution of assets between an investor and its associate or joint venture. The main consequence of the amendments is that a full gain or loss is recognised when a transaction involves a business (whether it is housed in a subsidiary or not). A partial gain or loss is recognised when a transaction involves assets that do not constitute a business, even if these assets are housed in a subsidiary.
IAS 38 Intangible assetsClarification of Acceptable Methods of Depreciation and Amortisation
The amended IAS 38 introduces a rebuttable presumption that revenue is not an appropriate basis for amortisation of an intangible asset.
Notes to the Financial Statement (cont’d)
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
44
This Presumption can only be Rebutted in Two Limited Circumstances:
1. The intangible asset is expressed as a measure of revenue; or
2. Revenue and consumption of the intangible asset are highly correlated.
Guidance is introduced to explain that expected future reductions in selling prices could be indicative of a reduction of the future economic benefits embodied in an asset.
IAS 40 Investment Property
The amendment provides guidance on transfers to, or from, investment properties. More specifically, the question was whether a property under construction or development that was previously classified as inventory could be transferred to investment property when there was an evident change in use. The IASB amended the paragraph to reinforce the principle for transfers into, or out of, investment property in IAS 40 to specify that such a transfer should only be made when there has been a change in use of the property.
Improvements to IFRSIFRS 1 First-time Adoption of International Financial Reporting Standards
The amendment deleted the short-term exemptions in paragraphs E3–E7 of IFRS 1, because they have now served their intended purpose.
IFRS 5 Non-current Assets Held for Sale and Discontinued OperationsChange in Methods of Disposal
The amendments introduce specific guidance in IFRS 5 for when an entity reclassifies an asset (or disposal group) from held for sale to held for distribution to owners (or vice versa), or when held-for-distribution accounting is discontinued.
The Amendments State that:
• Such reclassifications should not be considered changes to a plan of sale or a plan of distribution to owners and that the classification, presentation and measurement requirements applicable to the new method of disposal should be applied; and
Assets that no longer meet the criteria for held for distribution to owners (and do not meet the criteria for held for sale) should be treated in the same way as assets that cease to be classified as held for sale.
IFRS 7 Financial Instruments: DisclosureServicing Contracts
The amendments provide additional guidance to clarify whether a servicing contract is continuing involvement in a transferred asset for the purpose of disclosures required in relation to transferred assets. Paragraph 42C(c) of IFRS 7 states that a pass through arrangement under a servicing contract does not, in itself, constitute a continuing involvement for the purposes of the transfer disclosure requirements. However, in practice, most service contracts have additional features that lead to a continuing involvement in the asset, for example, when the amount and/or timing of the service fee depends on the amount and/or timing of the cash flows collected.
Notes to the Financial Statement (cont’d)
45
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
Applicability of the amendments to IFRS 7 on offsetting Disclosure to Condensed Interim Financial Statements
Amendments to IFRS 7were made to remove uncertainty as to whether the disclosure requirements on offsetting financial assets and financial liabilities (introduced in December 2011) and effective for periods beginning on or after 1 January 2013) should be included in condensed interim financial statements, and if so, whether in all condensed interim financial statements after 1 January 2013 or only in the first year. The amendments clarify that the offsetting disclosures are not explicitly required for all interim periods. However, the disclosures may need to be included in condensed interim financial statements to comply with IAS 34 Interim Financial Reporting.
IFRS 12 Disclosure of Interests in Other InterestsScope
Clarified the scope of the standard by specifying that the disclosure requirements in the standard, except for those in paragraphs B10–B16, apply to an entity’s interests listed in paragraph 5 that are classified as held for sale, as held for distribution or as discontinued operations in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations.
Investment Entities
Clarifies that an investment entity measuring all of its subsidiaries at fair value provides the disclosures relating to investment entities required by IFRS 12.
IAS 19 Employee Benefits
The amendments to IAS 19 clarify that the high quality corporate bonds to estimate the discount rate for post-employment benefits should be issued in the same currency as the benefits to be paid. These amendments would result in the depth of the market for high quality corporate bonds being assessed at currency level.
IAS 28 Consolidated Financial StatementsInvestment Entities Exemption
Clarified that the election to measure at fair value through profit or loss an investment in an associate or a joint venture that is held by an entity that is a venture capital organisation, or other qualifying entity, is available for each investment in an associate or joint venture on an investment-by-investment basis, upon initial recognition.
IAS 34 Interim Financial Reporting
The amendments clarify the requirements relating to information required by IAS 34 that is presented elsewhere within the interim financial report but outside the interim financial statements. The amendments require that such information be incorporated by way of cross-reference from the interim financial statements to the other part of the interim financial report that is available to users on the same terms and at the same time as the interim financial statements. 4. Use of Judgements, Estimates and Assumptions
The preparation of the Institution’s financial statements in conformity with IFRSs requires management to make judgments, estimates and assumptions that affect the application of policies, the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the end of the reporting period. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.
Notes to the Financial Statement (cont’d)
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
46
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.
4.1 Judgements
In the process of applying the Institution’s accounting policies, management has made the following judgments, which have the most significant effect on the amounts recognised in the consolidated financial statements:
4.2 Estimates and Assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Institution based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising beyond the control of the Institution. Such changes are reflected in the assumptions when they occur.
Estimates and assumptions which are reviewed on a continuous basis are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.
Loan Loss Provisioning
The estimation of the ultimate liability arising from loans and advances is the Institution’s most critical accounting estimate. There are several sources of uncertainty that need to be considered in the estimation of the liability that the Institution ultimately recognises as credit impairment allowance. For example loans and advances at any given date expose the Institution to the risk of default and inability to realize the related collateral to adequately cover for the loss.
Impairment of Available-for-Sale Financial Assets
The company assesses at each reporting date whether there is objective evidence that available-for-sale financial assets are impaired and impairment loss determined when the fair value of the asset is significantly less than its carrying amount shown in the books of the company. This determination of what is significant requires judgement. In making this judgement, the company evaluates among other factors, the normal volatility in share price, the financial health of the investee, industry and sector performance, changes in technology, and operational and financing cash flow. Impairment may be appropriate when there is evidence of deterioration in the financial health of the investee, industry and sector performance, changes in technology, and financing and operational cash flows.
Fair Value of Financial Instruments
The fair values of financial instruments where no active market exists or where quoted prices are not otherwise available are determined by using valuation techniques. In these cases the fair values are estimated from observable data in respect of similar financial instruments or using models. Where market observable inputs are not available, they are estimated based on appropriate assumptions. Where valuation techniques (for example, models) are used to determine fair values, they are validated and periodically reviewed by qualified personnel independent of those that sourced them. All models are certified before they are used, and models are calibrated to ensure that outputs reflect actual data and comparative market prices. To the extent practical, models use only observable data; however, areas such as credit risk (both own credit risk and counterparty risk), volatilities and correlations require management to make estimates.
Notes to the Financial Statement (cont’d)
47
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
Taxes
Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and the amount and timing of future taxable income. Given the wide range of business relationships and the long-term nature and complexity of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Institution establishes provisions, based on reasonable estimates, for possible consequences of audits by the tax authorities. The amount of such provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the Institution and the tax authority.
Deferred tax assets are recognised for all unutilsed capital allowances to the extent that it is probable that taxable profit will be available against which the capital allowances can be utilised. Significant management judgment is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.
Useful Economic Life of Property, Plant and Equipment
To a large extent, the financial statements are based on estimates, judgements and models rather than exact depictions of reality. Providing relevant information about the Company’s Property, plant and equipment requires estimates and other judgements. This includes, measuring the cost of an item of Property, plant and equipment including PPE that are self-constructed.
The Subsequent Allocation of Depreciation Involves Further Judgements and Estimates including:
• Allocating the cost of the asset to particular major components;
• Determining the most appropriate depreciation method;
• Estimating useful life; and
• Estimating residual value.
Notes to the Financial Statement (cont’d)
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
48
5. Interest Income
Placements and special depositsInvestment securitiesLoans and advances
6. Interest Expenses
Current AccountsTime and other depositsSavingsInterest on borrowings
7. Commissions and Fees
Loan Processing FeesAccount Maintenance FeeOther Commissions
8. Other Income
Profit on disposal
9. Operating Expenses
Staff Costs (Note 10)Advertising and MarketingAdministrative ExpensesDepreciationDirectors’ EmolumentsAuditors’ RemunerationRentOthers
10. Staff Costs
Staff salaries and allowancesSocial security costOthers
11. Credit Impairment Loss
Specific ImpairmentPortfolio impairments
2016GH¢
58,821,9133,594,102
58,082,640120,498,655
283,81545,418,318
3,861,493 6,274,13255,837,759
5,551,037380,020
1,890,7067,821,763
32,710
28,370,8861,228,515
14,386,503 3,921,466
455,470 90,000
1,623,912 4,981,528
55,058,280
20,453,5052,328,7135,588,668
28,370,886
3,185,217 492,689
3,677,906
2015GH¢
28,112,9623,244,945
45,512,71276,870,619
155,23329,749,917 2,516,093
-32,421,243
4,213,866306,887
580,8895,101,642
57,157
22,771,3621,194,5459,893,0121,608,086
79,86060,000
900,552 3,021,12739,528,544
15,747,638 2,691,692 4,332,032
22,771,362
(2,193,145) 2,804,116 610,971
Notes to the Financial Statement (cont’d)
49
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
12. Taxation
a. Income Tax Expense
Current Tax [Note 12 (c)]Under provision
Deferred Tax [Note 12 (e)]
Profit before Taxation
Tax at applicable tax rate at 25%Tax effect of non-deductible expensesTax effect of non-chargeable incomeTax effect of allowable expenditureTax effect of capital allowancesOrigination/Reversal of temporary differencesIncome Tax Expense
Effective tax rate
2016GH¢
3,258,765 -
3,258,765(523,331)
2,735,434
13,779,182
3,444,796
1,204,932
(1,090,093)(824,201)2,735,434
20%
2013201420152016
Payments during the year
GH¢
---
(2,090,975)
(2,090,975)
Balance at 31 December
GH¢
(1,361)14,214
(277,186)1,167,790
903,457
2015GH¢
1,361,754 -
1,361,754(607,428)
754,326
9,468,660
2,367,165-
(470,082)-
(988,327)(154,430)
754,326
7.97%
Balance at 1 January
GH¢
(1,361)14,214
(277,186) -
(264,333)
Charge/(Credit) for the year
GH¢
---
3,258,765
3,258,765
b. Reconciliation of Effective Tax
The tax charge in the Income Statement differs from the theoretical amount that would arise using the statutory income tax rate. This is explained as follows:
c. Current Tax
Notes to the Financial Statement (cont’d)
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
50
e. Deferred Tax
Balance at 1 JanuaryCharge to profit or lossBalance at 31 December
Deferred tax assets and liabilities are attributed to the following:
Deferred Tax Liabilities
Property and equipmentPortfolio impairment
13. Cash and Bank Balances
Cash on handBank balances
14. Held to Maturity Financial Assets
Treasury BillsCommercial paperUnifund accountFixed deposits
2016GH¢
367,024(523,331)(156,307)
667,894(824,201)
(156,307)
15,029,45919,834,257
34,863,716
17,530,338-
12,356235,748,979
253,291,673
2015GH¢
974,452(607,428)
367,024
521,453(154,430)
367,024
8,594,62116,705,574
25,300,195
13,936,26533,718,824
12,29792,189,968
139,857,355
201420152016
d. National Fiscal Stabilisation Levy
Payments during the year
GH¢
-
(700,433)
(700,433)
Balance at 31 December
GH¢
109,755172,704
(11,474)
270,985
Balance at 1 January
GH¢
109,755172,704
-
282,459
Charge/(Credit) for the year
GH¢
-
688,959
688,959
Notes to the Financial Statement (cont’d)
51
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
15. Loans and Advances to Customers Analysis by Type
CustomersStaffOthersGross Loans & AdvancesInterest in suspenseLess: Credit impairment allowance
Net loans & Advances
Unamortised Processing Fees
Balance at 1 JanuaryAdditions during the yearReleased into incomeBalance at 31 December
Credit Impairment Allowance Account
Balance at 1 JanuaryCharge for the yearBalance at 31 December
Analysis by Facility Type
uSolar loansStaff loansSusu loansOwn vehicle loansCommercial loans and advances
Analysis by Business Segment
Agriculture, forestry and fishing ManufacturingConstructionCommerce and financeTransport, storage and communicationUtilitiesServicesMiscellaneous
2016GH¢
80,325,02813,028,76324,131,086
117,484,877(14,581,116)
(8,514,832)
94,388,930
--
- -
4,836,9263,677,9068,514,832
1,037,57313,028,763
2,696,863793,245
99,928,433
117,484,877
-5,756,7552,917,942
81,226,5508,503,393
137,55216,488,350
2,454,335
117,484,877
2015GH¢
101,444,6759,857,4243,295,907
114,598,006(8,163,350)(4,836,926)
101,597,730
1,823,175-
(1,823,175) -
4,225,955 610,9714,836,926
272,4819,857,4242,324,974
995,415101,147,712
114,598,006
447,43115,647,020
3,216,26770,508,43310,763,981
700,65211,173,052 2,141,170
114,598,006
Notes to the Financial Statement (cont’d)
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
52
Loan loss provision ratioGross non-performing loans ratioRatio of 50 largest exposures (funded and non-funded) to exposures (funded and non-funded)
16. Other assets
StocksAccounts ReceivableDeposits and Prepaid ExpensesOthers
2016GH¢
3%13%
28%
2016GH¢
473,31437,678,15014,205,51515,547,69767,904,676
2015GH¢
1%4%
39%
2015GH¢
253,75817,142,342
7,890,97910,015,73935,302,818
Notes to the Financial Statement (cont’d)
53
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
17. P
rope
rty,
Pla
nt a
nd E
quip
men
t
2016
Cost
Bala
nce
at 1
Jan
2016
Addi
tions
dur
ing
the
year
Disp
osal
sTr
ansfe
r
Bala
nce
as a
t 31
Dec
Dep
reci
atio
n
Bala
nce
at 1
Janu
ary
2016
Char
ge fo
r the
yea
rD
ispos
als
Bala
nce
as a
t 31
Dec
201
6
NBV
as a
t 31
Dec
201
6
Land
&
Build
ings
G
H¢
11,6
11,0
441,
244,
463
2,32
7,21
2
15,1
82,7
19
274,
047
236,
976
-
511,
023
14,6
71,6
96
Leas
ehol
d Pr
emis
esG
H¢
7,45
8,72
9 -
2,16
8,75
6
9,62
7,48
5
1,63
8,80
641
4,37
4
-
2,05
3,18
0
7,57
4,30
5
Mot
or
Vehi
cle
GH
¢
2,12
5,26
547
9,03
3(2
0,00
0)
-
2,58
4,29
8
909,
338
388,
157
(8,0
00)
1,28
9,49
5
1,29
4,80
3
Com
pute
r ha
rdw
are
GH
¢
1,73
5,90
542
0,61
5
-
2,15
6,52
0
1,15
4,65
835
3,49
3
-
1,50
8,15
1
648,
369
Offi
ce
Equi
pmen
tG
H¢
5,14
4,64
81,
777,
498
-
6,92
2,14
6
1,97
4,65
61,
071,
384
-3,
046,
040
3,87
6,10
6
Furn
iture
&
Fitt
ings
GH
¢
3,12
5,50
240
1,00
2
-
3,52
6,50
4
1,07
3,11
863
0,18
2
-
1,70
3,30
0
1,82
3,20
4
Cap
ital W
ork
in P
rogr
ess
GH
¢
-10
,029
,931
(4,4
95,9
68)
5,53
3,96
3 -
-
-
5,53
3,96
3
Tota
lG
H¢
32,4
08,3
1115
,230
,997
(166
,600
)
-
47,4
72,7
08
7,55
6,73
03,
389,
611
(103
,413
)10
,842
,928
36,6
29,7
79
Plan
t &
Mac
hine
ryG
H¢
1,20
7,21
887
8,45
4(1
46,6
00)
-
1,93
9,07
2
532,
107
295,
045
(95,
413)
731,
739
1,20
7,33
3
Note
s to
the
Finan
cial S
tate
men
t (co
nt’d)
For t
he Ye
ar En
ded
31 D
ecem
ber 2
016
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
54
17b.
Pro
pert
y, P
lant
an
d Eq
uipm
ent
2015
Cost
Bala
nce
at 1
Jan
2015
Addi
tions
dur
ing
the
year
Disp
osal
sTr
ansfe
r
Bala
nce
as a
t 31
Dec
Dep
reci
atio
n
Bala
nce
at 1
Janu
ary
2015
Char
ge fo
r the
yea
rD
ispos
als
Tran
sfer
Bala
nce
as a
t 31
Dec
201
5
NBV
as a
t 31
Dec
201
5
Land
&
Build
ings
G
H¢
8,78
9,71
02,
652,
663 -
1
68,6
71
11,6
11,0
44
128,
705
113,
909 -
31,4
3327
4,04
7
11,3
36,9
97
Leas
ehol
d Pr
emis
esG
H¢ - - -
7,45
8,72
9
7,45
8,72
9 - - -1,
638,
806
1,63
8,80
6
5,81
9,92
3
Mot
or
Vehi
cle
GH
¢
1,33
2,79
698
9,90
0(1
97,4
31)
-
2,12
5,26
5
717,
534
294,
762
(112
,431
)
9,47
390
9,33
8
1,21
5,92
7
Com
pute
r H
ardw
are
GH
¢
1,20
9,75
352
6,15
2 -
-
1,73
5,90
5
758,
119
361,
769 -
34,7
701,
154,
658
581,
247
Offi
ce
Equi
pmen
tG
H¢
2,01
1,62
61,
237,
803 -
1,89
5,21
9
5,14
4,64
8
1,03
2,51
836
7,01
3 -57
5,12
51,
974,
656
3,16
9,99
2
Furn
iture
&
Fitt
ings
GH
¢
700,
582
545,
219 -
1,87
9,70
1
3,12
5,50
2
426,
708
155,
477 -
490,
933
1,07
3,11
8
2,05
2,38
4
Cap
ital W
ork
in P
rogr
ess
GH
¢
5,60
1,32
95,
930,
991
(130
,000
)(1
1,40
2,32
0)
-
2,69
6,11
7 - -(2
,696
,117
)
-
-
Tota
lG
H¢
20,2
90,6
8812
,496
,954
(379
,331
)
-
32,4
08,3
11
6,17
5,93
81,
431,
523
(138
,381
)87
,650
7,55
6,73
0
24,8
51,5
81
Plan
t &
Mac
hine
ryG
H¢
644,
892
614,
226
(51,
900)
-
1,20
7,21
8
416,
237
138,
593
(25,
950)
3,
227
532,
107
675,
111
Note
s to
the
Finan
cial S
tate
men
t (co
nt’d)
For t
he Ye
ar En
ded
31 D
ecem
ber 2
016
55
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
18. Intangibles
CostBalance at 1 JanAdditions
DepreciationBalance at 1 JanCharge for the year
Net Book Value
19. Due to Customers
Current accountsTime depositSavings depositSusu deposits
20. Other Liabilities
Interest payablePayment ordersOther creditors & accruals
Borrowings from other Banks
2016GH¢
1,484,177 246,677
1,730,854
252,072531,854
783,926
946,928
71,245,626185,220,251
60,399,986 38,619,591
355,485,454
14,352,2669,411,7393,446,296
23,023,276
50,233,578
2015GH¢
76,4951,407,682
1,484,177
75,509176,563
252,072
1,232,105
51,438,126122,009,050
41,202,01428,612,702
243,261,892
8,792,8771,002,0643,766,057 -
13,560,998
Notes to the Financial Statement (cont’d)
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
56
21. Stated Capital
Authorised Number of ordinary shares of no par value
Issued Number of ordinary shares of no par value
Balance at 1 JanuaryTransfer from Income surplusBal at 31 Dec
Issued and Fully Paid:Issued for Cash ConsiderationIssued for Consideration other than cash
2016
500,000,000
2016
2,309,2172,321,597
4,630,814
2016Value
GH¢4
49,861,9815,240,019
55,102,000
2016Number
49,861,981 5,240,019
55,102,000
2015
500,000,000
2015
881,8151,427,402
2,309,217
2015Number
48,361,981 1,500,000
49,861,981
2015ValueGH¢
48,361,981 1,500,000
49,861,981
There is no unpaid liability on any share and there are no shares in treasury 22. Capital Surplus
This represents the surplus arising from the revaluation of certain items of property and equipment.
23. Statutory Reserve Fund
This represents the cumulative amounts set aside as a non-distributable reserve from annual net profit after tax in accordance with Section 29 (1) of the Banking Act, 2004 (Act 673) as amended by the Banking (Amendment) Act of 2007, Act (738). The amounts transferred annually range from 12.5% to 50% of net profit after tax, depending on the ratio of the current statutory reserve fund to paid-up capital.
24. Regulatory Credit Risk Reserve
This represents the excess of provision for bad and doubtful debts in respect of loans as per Bank of Ghana computations guidelines and loan impairment loss provision as per IFRS computations
Notes to the Financial Statement (cont’d)
57
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
Cash and bank balances Government Securities – 91 day treasury bills
2016GH¢
34,863,71617,530,338
52,394,054
2015GH¢
25,300,195 13,936,265
39,236,460
25. Income Surplus
This represents the residual of cumulative annual profits that are available for distribution to shareholders.
26. Cash and Cash Equivalents
For the purposes of the cash flow statements, cash and cash equivalents comprise balances with less than 91 days maturity from the date of acquisition.
27. Related Party
This relates to intercompany dealings and transactions with key management personnel.The balances outstanding as at year-end were as follows:
i. Balances with Related parties
Cash & Cash Equivalents:Balance as at December 31st,
Bank accounts balance with uniBank
Government Securities – 91 day treasury bills with uniBank
Held-to Maturity Financial Assets:Balance as at December 31st,
Fixed deposits with uniBank
Placements with uniSecurities
2016
19,834,257
17,530,338
2016
139,218,230
96,543,105
2015
16,705,574
13,936,265
2015
44,207,871
47,982,097
uniBank (Ghana) Limited is the sole banker for uniCredit Ghana Limited.
Notes to the Financial Statement (cont’d)
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
58
Directors’ emolumentsSalaries and other short-term employee benefits of key management and staff
Directors’Officers and other employees
2016
455,47028,370,887
28,826,357
2016
-13,028,763
13,028,763
2015
79,86022,773,361
22,853,221
2015
-9,857,424
9,857,424
The sales to and purchases from related parties are made at normal market prices. Details of significant transactions carried out during the year with related parties are as follows:
ii. Directors, Key Management and Staff Compensation
iii. Transactions with Directors, Officers and Other Employees
The following are loan balances as at December 31st, due from;
Interest rates charges on balances outstanding from staff are lower than the Bank’s base rate which is in compliance with the Bank of Ghana notice number BG/GOV/SEC/2012/02. This is due to the lower inherent risk in these loans.
Terms and conditions of related party transactions
The transactions with related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31 December 2016, the company has not recorded any impairment of receivables relating to amounts owed by related parties.
Notes to the Financial Statement (cont’d)
59
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
28. Fair Values of Financial Assets and Liabilities
i. Financial Instruments Not Measured at Fair ValueThe table below summaries the carrying amounts and fair values of those financial assets and liabilities not presented on the statement of financial position at their fair values:
Financial assetsCash and bank balanceHeld-to-maturity financial assets Loans and advances to customers Other assets (excluded prepayments)
Financial liabilitiesCustomer depositsOther liabilities
Carrying amount
2015GH¢
25,300,195139,857,355101,597,730
27,411,839
243,261,892 13,560,998
Fair value2015GH¢
25,300,195139,857,355101,597,730
27,411,839
243,261,892 13,560,998
Carrying amount
2016GH¢
34,863,716253,291,673
94,388,93053,699,162
355,485,45450,233,578
Fair value2016GH¢
34,863,716253,291,673
94,388,93053,699,162
355,485,45450,233,578
ii. Loans and advances to other financial institutions
Loans and advances to other financial institutions include inter-bank placements and items in the course of collection. The carrying amount of floating rate placements and overnight deposits is a reasonable approximation of fair value.
The estimated fair value of fixed interest bearing deposits is based on discounted cash flows using prevailing money-market interest rates for debts with similar credit risk and remaining maturity.
iii. Loans and advances to customers
Loans and advances are net of charges for impairment. The estimated fair value of loans and advances represents the discounted amount of estimated future cash flows expected to be received. Expected cash flows are discounted at current market rates to determine fair value. The carrying amount approximates their fair value.
iv. Deposits from banks and due to customers
The estimated fair value of deposits with no stated maturity, which includes non-interest bearing deposits, is the amount repayable on demand. The estimated fair value of fixed interest-bearing deposits not quoted in an active market is based on discounted cash flows using interest rates for new debts with similar remaining maturity. The carrying amount approximates their fair value.
v. Off-balance sheet financial instruments
The estimated fair values of the off-balance sheet financial instruments are based on markets prices for similar facilities. When this information is not available, fair value is estimated using discounted cash flow analysis.
Notes to the Financial Statement (cont’d)
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
60
Fair value hierarchy
IFRS 7 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources; unobservable inputs reflect the Company’s market assumptions. These two types of inputs have created the following fair value hierarchy:
• Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities. This level includes listed equity securities and debt instruments on exchanges (for example, The Ghana Stock Exchange). • Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices). This level includes the majority of Bank of Ghana’s securities and other derivative contracts.
• Level 3 – inputs for the asset or liability that are not based on observable market data (unobservable inputs). This level includes equity investments and debt instruments with significant unobservable components. As at 31 December 2016, the Company did not hold any level 3 financial assets and/or liabilities.
This hierarchy requires the use of observable market data when available. The Company considers relevant observable market prices in its valuation where possible. Financial instruments measured at fair value at 31 December 2016 were classified as follows:
29. Contingencies and commitments
Legal proceedings and regulations
At the reporting date, the Company’s legal proceedings were those in respect of recovery of its overdue loans and advances and related. Provisions are recognised in those cases where the company is able to reliably estimate the probable loss.
Contingent liabilities
There were no contingent liabilities as at reporting date.
Commitments
There were no capital commitments as at reporting date.
30. Financial risk management
a. Introduction and Overview
An organization may be exposed to different types of financial risks depending on the size and complexity of business activities. uniCredit (Ghana) Limited, however, is generally exposed to credit, market, liquidity, operational, compliance, legal, regulatory and reputational risks.
The Institution’s risk management framework, objectives, policies, procedures and processes for identifying, measuring, monitoring and controlling these risks, and regulatory capital management is presented below;
Notes to the Financial Statement (cont’d)
61
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
Risk Management Framework
The Board of Directors and Senior Management have developed and established policies and procedures to facilitate effective risk management. These policies and procedures provide guidance on risk appetite/tolerance limit, risk identification, monitoring and control and adherence to set risk limits. The risk management policies and procedures are continually reviewed to reflect changes in economic and financial landscape as well as products and services offered.
30. Financial risk management (continued)
The Board of Directors has the overall responsibility for the establishment and oversight of the Institution’s risk management framework. The responsibilities of the Board of Directors include; setting out the Institution’s overall risk appetite/tolerance limit, ensuring that the Institution’s overall risk exposure is maintained at prudent levels and consistent with available capital. They also include; ensuring that Management as well as individuals responsible for Risk Management possess sound expertise and knowledge to accomplish the risk management function and ensuring that appropriate policies and procedures for risk management are in place.
The Board’s sub-committees on audit, credit and the appointment and remuneration as a whole oversee implementation of the broad risk management policies and objectives of the Institution.
b. Credit Risk
Credit Risk Management
Credit Risk stems from outright default due to inability or unwillingness of a client or counterpart to meet commitments in relation to lending, trading settlement and other financial transaction. Resultant losses may result in reduction in portfolio value due to the actual or perceived deterioration in loan portfolio quality.
The Board sub-committee on credit is responsible for implementing the credit risk policy/strategy, monitors credit risk on an institution-wide basis and ensures compliance with credit limits to be approved by the Board.
Business strategies, policies and procedures for managing credit are determined institution-wide with specific policies and procedures being adopted for small and medium enterprises and salary loans.
Neither past due nor impairedPast due but not impairedImpaired
Gross loans and advances
2016Term loans
GH¢
112,014,5571,792,4143,677,906
117,484,877
2015Term loans
GH¢
109,301,0541,682,6813,614,271
114,598,006
Notes to the Financial Statement (cont’d)
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
62
Repossessed Collateral
There were no repossessed assets as at 31 December 2016 (2015: nil).
Maximum Exposure to Credit Risk
Past due up to 30 daysPast due 30-60 daysPast due 60-90 days
2016GH¢
1,087,231 493,628 211,555
2015GH¢
982,681420,401279,599
30. Financial risk management (continued)
Loans and advances neither past due nor impaired
The credit quality of the portfolio of loans and advances that were neither past due nor impaired can be assessed by reference to the internal rating system adopted by the Company. These loans are all classified as current.
Loans and advances past due but not impaired
Loans and advances less than 90 days past due are not considered impaired, unless other information is available to indicate the contrary. Gross amount of loans and advances by class to customers that were past due but not impaired were as follows:
Cash and bank balanceHeld-to-maturity financial assets Loans and advances to customers
2016GH¢
34,863,716253,291,673 94,388,930
382,544,318
2015GH¢
25,300,195139,857,355101,597,730
266,755,280
Managing Problem Loans
The Recoveries Unit within the Credit Department manages delinquent facilities including outright recoveries or nursing of such problem loans back to health. At delinquent and past due stages, where recovery efforts are unsuccessful, the Credit Department refers the client to the Institution’s legal department.
Provisioning for Loans and Advances Credit losses are anticipated and charged in the Statement of Profit or Loss and Comprehensive Income on monthly basis. The balance in the impairment allowance account is always equal to at least the required provisions based on the Institution’s current risk rating profile. If the status of the loan worsens, the balance of the provision account is increased by an additional charge against earnings.
Notes to the Financial Statement (cont’d)
63
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
c. Market Risk
Market risk is the potential for loss resulting from adverse movement in risk factors such as interest rates, and equity and commodity prices. The Institution’s Finance & Administration Department has oversight for market risk management.
d. Interest Rate Risk
In order to quantify the Institution’s exposures to structural interest rate risk, assets and liabilities with fixed and floating rates are analyzed to identify any gap. Maturities on outstanding positions are determined on the basis of contractual terms governing transactions.
e. Liquidity Risk
The Institution’s liquidity risk management systems comprise two main processes;
• Assessment of the Institution’s financing requirements on the basis of budgets and forecasts in order to plan appropriate funding sources and;
• Analysis of daily cash report to monitor daily cash flow position
Credit Risk Rating
StandardSubstandardDoubtfulLoss
Days Past Due
<9091-180
181-360Over 360
Minimum Provision Required (%)
12050
100
In conformity with Bank of Ghana‘s directives, the minimum provision that are held are as follows;
Notes to the Financial Statement (cont’d)
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
64
At 31 December 2016
Financial AssetsCash and bank balance with uniBankHeld-to-maturity financial assets Loans and advances to customers
Financial LiabilitiesCustomer depositsOther liabilities
At 31 December 2015
Financial AssetsCash & bank balances with uniBankFinancial assetsLoans and Advances to Customers
Financial LiabilitiesCustomer DepositsOther Liabilities
> 3 Months< than 1 year
GH¢
-182,562,761 72,997,040
255,559,801
223,351,511 50,233,578
273,585,089
> 3 Months< than 1 year
GH¢
-139,857,355
48,422,522
188,279,877
95,003,90913,560,998
108,564,907
3 years and over
GH¢
--
830,451
830,451
- -
-
3 years and over
GH¢
--
-
-
- -
-
TotalGH¢
34,863,716253,291,673 117,484,877
405,640,266
355,485,454 50,233,578
405,719,032
TotalGH¢
25,300,195139,857,355114,598,006
279,755,556
243,261,89213,560,998
256,822,890
3 Months or less
GH¢
34,863,71670,728,912
41,898,426
147,491,054
132,133,943 -
132,133,943
3 Months or less
GH¢
25,300,195-
41,008,600
66,308,795
148,257,983 -
148,257,982
> 1 year <than 3
years GH¢
--
1,758,460
1,758,460
- -
-
> 1 year <than 3
years GH¢
--
25,166,884
25,166,884
- -
-
30. Financial risk management (continued)
Maturities of Financial Assets and Liabilities are as Follows:
Notes to the Financial Statement (cont’d)
65
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
30. Financial risk management (continued)
e. Operational Risk
Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events. It is the risk of loss arising from the potential that inadequate information systems, breaches of internal controls, fraud, technological failure and unforeseen catastrophes may result in unexpected loss or reputational problems.
Over the past years the Institution has developed a thorough and consistent framework and policies to control and actively manage its operational risk. The Institution’s framework is aligned with Bank of Ghana’s regulatory requirements.
f. Compliance and Regulatory Risk
In order to strengthen the Institution’s compliance with regulatory requirements, the Institution organizes series of dedicated training on a regular basis to equip staff with compliance and regulatory issues in order to minimize risk emanating there from.
g. Legal Risk
The Institution is not dependent on any patent or any industrial, commercial or financial contract. The Institution’s activities are undertaken in a manner which adequately reduces the Risks which may arise out of material litigation to be initiated against it (the Institution).
h. Reputational Risk
The Institution conducts its business in a responsible, professional and transparent way. By offering simplified products and following the necessary legal and regulatory processes, the Institution safeguards the interest of its clients as well as its reputation. Furthermore, the Institution maintains close ties with the communities in which it operates by supporting them in various ways. This is aimed at demonstrating our commitment and fostering a long term relationship with our clients and the public at large. We manage our image and reputation in a professional manner.
i. Capital Management
The primary objectives of the Institution’s capital management are to ensure that the Institution complies with externally imposed capital requirement by the Bank of Ghana and that the Institution maintains strong credit ratings and healthy capital ratios in order to support its business and maximize shareholders’ value. In order to maintain the desired level of capital, the Institution may vary its dividend policy or issue new shares. The Institution complied with all externally imposed capital requirement throughout the period.
Capital adequacy and use of regulatory capital are monitored regularly by management, employing techniques based on the guidelines developed by the Basel Committee, as implemented by the Bank of Ghana for supervisory purposes. The required information is filed with Bank of Ghana on a monthly basis.
Bank of Ghana requires each non-bank financial institution to:
(a) hold the minimum level of regulatory capital of GH¢7 million;
(b) maintain a ratio of total regulatory capital to the risk-weighted assets plus risk-weighted off-balance sheet assets (the ‘Basel ratio’) at or above the required minimum of 10%.
Notes to the Financial Statement (cont’d)
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
66
Tier 1 Capital
Share capitalDisclosed reserve
Tier 1 CapitalLess:Intangibles
Net Tier 1 Capital
Total Assets (less Contra items)Less:Cash on handClaims on Bank of Ghana (Bills and bonds)Invests in the capital of other banks and financial institutions80% of claims on other banks (cedis/forex)Adjusted Total AssetsAdd:100% of 3 years average annual gross income
Adjusted Asset Base
Adjusted capital base as percentage of adjusted asset base
Capital Surplus/ Deficit
2016GH¢
55,102,00020,877,089
75,979,089
75,979,089
488,182,009
15,029,459
218,500,744200,026,620
52,285,011
252,311,631
32.22%
56,057,373
2015GH¢
49,861,98121,071,764
70,933,745
-
70,933,745
328,406,117
8,594,621
125,250,343194,561,153
36,096,560
230,657,713
30.75%
47,867,974
The table below summarises the composition of regulatory capital and the ratios at 31 December:
31. Corporate Social Responsibility
Amount spent on fulfilling Social Responsibility obligations during the year was GH¢ 54,500 (2015: GH¢ 155,571)
32 Event after the Reporting Period
No significant event occurred after the end of the reporting date which is likely to affect these financial statements.
Notes to the Financial Statement (cont’d)
67
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
Operating expenses
Staff CostsStaff Salaries and BonusStaff AllowancesSocial Security CostMedical ExpensesOther staff Cost Training Expenses
Other Operating CostsRent, rates and taxesMaintenance of plant /machineryElectricity and waterPostage and telephonePrinting and stationeryInsuranceSecurity costRepairs & maintenance- office equipmentRepairs -furniture & fittingsMarketing, publicity and advertsSpecie movementProfessional FeesNewspaper & publicationRefreshment & beveragesCleaning and sanitationSubscription and fees WagesBusiness promotionLicenses and registrationLoan recovery expensesRepairs and maintenance - motor vehiclesRenewals and maintenanceComputer and accessoriesFraud investigationTravelling and transportSME loans insurance premiumMaterials and suppliesSundry/other expensesDonationDirectors FeesAudit FeesBank chargesGlobus Maintenance chargesInternet, WanPassbook & Cheques
2016GH¢
21,057,3654,255,9402,328,713
712,918273,958257,279
28,886,173
1,623,912170,181152,210
49,510972,642245,837926,204178,301
4901,228,515
17,225211,380
48,554183,713780,895129,452115,630188,593194,472
38,625805,579345,835
36,774-
4,816,74213,199
1,581,7281,997
143,68060,28090,00081,77535,895
251,44526,555
2015GH¢
14,325,5231,422,1152,691,692
511,4713,542,963
279,59622,773,360
900,552105,588
78,34275,196
533,566227,199633,299
69,4942,783
1,194,54517,77880,80038,443
217,607545,196270,616212,867227,320
55,05122,210
173,199362,164
27,4711,520
3,548,95414,967
832,63729,365
155,57179,86060,00038,454
122,29896,293
6,414
Notes to the Financial Statement (cont’d)
FOR THE YEAR ENDED 31 DECEMBER
ANNUALREPORT 2016
68
Susu CommissionFuel expensesLegal expensesOutsources ServiceCalendars & DairiesCommunicationDirectors Other expensesSMS Alert ChargesAudit expensesElectricity ExpenseFuel & LubricantGenerator Running ExpensesDepreciation
Total
2016GH¢
229,0131,451,554
174,0971,421,087
68,469432,719
68,00082,85526,897
1,481,667431,149635,221
3,921,46526,172,108
55,058,281
2015GH¢
190,7751,340,958
86,167253,607
56,495398,671
46,84010,53921,066
662,914287,833733,614
1,608,08616,756,419
39,528,544
Notes to the Financial Statement (cont’d)
CONTACT: BRANCHES:uniCredit Ghana Limited(Savings and Loans Company)No.3 North Ridge Lane, NorthRidge, AccraP. O. Box GP 18729, Accra
Tel: +233 302 666648, 672690Fax: +233 302 672691Enquiries: 0277 762005/0277766072
Toll Free: 0800 - 218210
AdabrakaTel: +233 302 260081-3
AgbogbloshieTel: +233 302 688438
ApenkwaTel: +233 302 974446/954032
AshaimanTel: +233 342 290859
DomeTel: +233 302 901653-8
KaneshieTel: +233 302 976356
KantamantoTel: +233 302 684737, 960681
Kantamanto CentralTel: +233 302 631210 / 4
KejetiaTel: +233 509 038331-3
MakolaTel: +233 302 660196 / 7
Suame MagazineTel: +233 501 297948-50
Amanful - TakoradiTel: +233 312 032104/63
Tafo - KumasiTel: +233 322 0 48701- 4
Dr. Mensah - KumasiTel: +233 322 397772
Ridge BranchTel: +233 302 201600
KokomlemleTel: +233 501 451557/9
KasoaTel: +233 501 451556
NimaTel: +233 302 201173 / 83 / 96
KoforiduaTel: +233342 096 040 / 0342 097112
Abossey OkaiTel: +233 302 663 028/29/31
NunguaTel: +233 302 721072 / 3 / 5
MadinaTel: +233 302 666648 / 672690
TechimanTel: +233 302 666648 / 672690
TamaleTel: +233 302 666648
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