ACCESS BANK (GHANA) LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017

Transcription

1 ACCESS BANK (GHANA) LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017

2 Annual Report CONTENTS Page Corporate information 1 Financial highlights 2 Report of board of directors 3 6 Corporate Governance 5 8 Independent auditor s report 9 13 : Statement of comprehensive income 14 Statement of financial position 15 Statement of changes in equity Statement of cash flows 18 Notes Shareholder information 77 Other financial information Valued Added Statement 83

3 Annual Report CORPORATE INFORMATION Board of Directors Frank Beecham (Chairman) Dolapo Ogundimu (Managing Director) Dela Selormey Abena Amoah Ernest Mintah Joyce Dimkpa Kola Ajimoko Kris Ifeanyi Njoku (Appointed 9 January 2017) Obinna Nwosu (Resigned 9 May 2017) Elias Igbinakenzua (Resigned 9 May 2017) Secretary Albert Kwame Gyan Auditor PricewaterhouseCoopers No. 12 Airport City UNA Home, 3 rd Floor PMB CT 42, Cantonments Accra Registered Office Access Bank (Ghana) Limited Starlets 91 Road Opp. Accra Sports Stadium, P.O. Box GP 353 Osu Accra Correspondent banks Access Bank Plc Access Bank UK Bank of Beirut Citibank NY Commerzbank Diamond Bank, UK FBN Bank, UK Ghana International Bank Mauritius Commercial Bank Standard Bank, SA 1

4 Annual Report FINANCIAL HIGHLIGHTS OF THE GROUP (In thousands of Ghana Cedis) Revenue 466, ,520 Profit before income tax 58,597 69,070 Profit after income tax 29,599 41,949 Shareholders funds 469, ,562 Capital expenditure (including intangible assets) 27,225 35,416 Total assets 3,199,809 2,679,839 Earnings per share (basic and diluted) (Ghana pesewas) Net assets per share (GH )

5 Annual Report REPORT OF THE DIRECTORS The directors present their report together with the audited financial statements for the year ended 31 December 2017 in accordance with the Companies Act, 1963 (Act 179) and the Banks and Specialised Deposit Taking Institutions Act, 2016 (Act 930) which discloses the state of the affairs of the Bank and the Group. Statement of directors responsibility The directors are responsible for the preparation of financial statements for each financial year, which gives a true and fair view of the state of affairs of the Group and the profit or loss and cash flows for that period. In preparing these financial statements, the directors have selected suitable accounting policies and applied them consistently, made judgements and estimates that are reasonable and prudent and followed International Financial Reporting Standards and complied with the requirements of the Companies Act 1963 (Act 179) and the Banks and Specialised Deposit Taking Institutions Act, 2016 (Act 930) The directors are responsible for ensuring that the Group keeps proper accounting records that disclose with reasonable accuracy at any time the financial position of the Bank. The directors are also responsible for safeguarding the assets of the Bank and taking reasonable steps for the prevention and detection of fraud and other irregularities. We have no plans or intentions, for example to dispose of the business or cease operations that may materially alter the carrying value or classification of assets and liabilities reflected in the financial statements. Financial report The financial results for the year ended 31 December 2017 are as follows; In thousands of Ghana Cedis The Group The Bank Profit before tax 58,597 58,587 from which is deducted: National fiscal stabilisation levy of (2,930) (2,929) Income tax expense of (26,068) (26,066) Leaving a net profit after tax of 29,599 29,592 when added to the balance brought forward on income surplus of 14,119 13,105 Leaving a balance of 43,718 42,697 add transfers from credit risk reserve 7,999 7,999 less transfers to statutory reserve (7,398) (7,398) gives a balance carried forward of 44,319 43,298 In accordance with Section 34(1) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930), an amount of GH 7,398,000 was transferred to the statutory reserve fund from the income surplus, bringing the cumulative balance on the statutory reserve fund to GH 129,281,000 at the year end. 3

6 Annual Report REPORT OF THE DIRECTORS (continued) The board of directors do not recommend the payment of dividend for the year ended 31 December Directors and their interests The present membership of the Board is set out on page 1. The directors interests in the issued ordinary shares of the Bank at 31 December 2017 is as follows: Name Mr. Ogundimu Oludolapo Omotayo No. of shares 10,000 Directors' interests in contracts The directors have no material interest in contracts entered into by the Bank. Nature of business The Bank is authorised by Bank of Ghana to carry on the business of universal banking. Subsidiaries The Bank has two wholly owned subsidiaries; Big Ticket Holdings Limited (BTH) and Triumph Properties Limited (TPL). BTH is currently operating as a leasing company. TPL is dormant. Holding company The Bank is a subsidiary of Access Bank Plc, a company incorporated in the Federal Republic of Nigeria and licensed to undertake banking and related services. Auditor The auditor Messrs PricewaterhouseCoopers has expressed willingness to continue in office in accordance with Section 134 (5) of the Companies Act, 1963 (Act 179). Approval of the consolidated financial statements The Board of Directors approved the consolidated financial statements on 9 March 2018 and were signed on their behalf by: Frank Beecham Chairman Dolapo Ogundimu Managing Director 4

7 Annual Report CORPORATE GOVERNANCE The Bank is committed to implementing the best practice standards of corporate governance. It is governed under a framework that enables the Board to discharge its oversight functions while providing a strategic direction for the management. Board of Directors Composition The Board of Directors is made up of a Non- Executive Chairman, Six (6) Non-Executive Directors and two (2) Executive Directors. The Board remains independent of management and carries out its functions in an objective and effective manner. Profile of the Board of Directors Frank W. K. Beecham, Chairman, 65 years Mr. Beecham holds an LLB from the University of Ghana and a Professional Qualifying Certificate from the Ghana school of Law. He was appointed as the Board Chairman on November 18, He is a lawyer by profession, a past president of the Ghana Bar Association and partner at Bram-Larbi, Beecham and Company. Mr. Beecham worked at Merchant Bank (Ghana) Limited now known as Universal Merchant Bank and its subsidiaries in 1977 where he served as General Manager (Corporate Business Development), Company Secretary, Legal Adviser and Registrar. Mr. Beecham was instrumental in setting up several companies by Merchant Bank including Merban Finance and Leasing Company, Universal Company Limited, and Universal Insurance Consultants Limited. Oludolapo Ogundimu, Managing Director, 57 years Mr. Ogundimu holds a BSc in Business Administration and an MBA from Ogun State University in Nigeria. He was appointed as Managing Director on 7th March, 2012 and has over 28 years of experience in the banking industry. Prior to his appointment, he worked as the Managing Director of Guaranty Trust Bank (Ghana) Limited from 2005 to October 2011 and General Manager of Access Bank (Ghana) Limited from January 2012 till his appointment as Managing Director. Mr. Ogundimu is an alumnus of the Kellogg School of Management, Executive Management Programme of the Columbia Business School (USA), Harvard Business School, International Institute for Management Development (IMD) Switzerland and the Lagos Business School. Joseph Vincent Dela Selormey, Non-Executive Director, 67 years Mr. Selormey, a Chartered Accountant and banker, holds an IMBA from Wisconsin International University, Ghana, and is a Fellow of the Institute of Chartered Accountants Ghana. He was appointed to the Board on February 11, He began his banking career at the Bank of Ghana in 1973 where he rose to the Head of Banking Supervision Department in Mr. Selormey led the implementation of the International Financial Reporting Standards by banks in Ghana. He also assisted in extending financial services to rural communities in Sierra Leone. Mr. Selormey currently works with Mark Trust as a member of the FinAScope Steering Committee. He is also a director of XDS Data Ghana Limited. Abena Amoah, Non-Executive Director, 45 years Ms. Amoah is a financial and investment advisor and holds a BSc Administration in Accounting from the University of Ghana Business School and attended the University of Colorado s Daniel College of Business. She was appointed to the Board in She has over 15 years of experience and began her career with Strategic African Securities. She is the founder and Chief Executive Officer of Baobab Advisors. Prior to that, she was Chief Executive Officer of NewWorld Renaissance Securities Limited and Head of Investment Banking and Finance, Ghana at Renaissance Capital Moscow from April 2008 to April She is also a non-executive Director of African Women s Development Fund, Foschini Ghana and Wapic Insurance Ghana Limited. 5

8 Annual Report CORPORATE GOVERNANCE (continued) Profile of the Board of Directors (continued) Ernest Mintah, Non-Executive Director, 64 years Mr. Mintah is a Banker and Economist and holds a bachelor s degree in Economics and Management from Eckerd College (USA) and post graduate degrees from the Columbia University (New York), Bradford University (UK) and PhD from the University of Southern California. He was appointed to the Board in November Mr. Mintah has over 30 years of experience in the banking and finance sectors in Ghana and the United States of America and has been involved in long term lending of asset-based financing to several sectors in Ghana. He is currently the Chief Executive Officer of Ghana Leasing Company Limited and serves on the Boards of the Ghana's Export Development and Agricultural Investment Fund. He is also the president of the Ghana Association of Leasing Companies. Joyce Dimkpa, Non-Executive Director, 43 years Ms. Dimkpa holds a Bachelor degree from the University of Port Harcourt and is a qualified Chartered Accountant (ACCA) and a Chartered Financial Analyst (CFA). Ms. Dimkpa is an experienced banker whose work spans over 17 years in the industry. Prior to joining Access, she worked with FSB International Bank where she began her career. She earned a one-year secondment with the Netherlands Development Finance Company (FMO) where she was responsible for leading FMO participation in originating several project finance and equity transactions across Africa, Europe and the Middle East. She has held various portfolios managing corporate and investment banking clients. She possesses diverse professional background and extensive experience in International Corporate Banking, Finance Analysis and Project Finance. She has attended several executive leadership programmes from leading educational institutions. Kris Ifeanyi Njoku, Executive Director, 48 years Mr. Njoku holds an MSc in Public Management from the University of Birmingham, UK and began his banking career in Guaranty Trust Bank Plc, Nigeria and later Guaranty Trust Bank, UK Limited, having over 21 years cognate banking experience. He joined Access Bank Plc in Prior to his appointment as Executive Board Director of Access, he was the Country Managing Director of Access Bank DR Congo ( ) and is credited with transforming the Bank and improving its profitability. He managed the Dangote Conglomerate as the Group Head of Cement & Logistics Group. He was also the pioneer Head of Institutional Banking at Guaranty Trust Bank, UK Limited ( ) and is a fellow of the British Chevening Scholarship Programme of the British Government. Kolawole Ajimoko, Non-Executive Director, 48 years Mr. Ajimoko holds a BSc. Banking & Finance from Ondo State University and an MBA from Rivers State University of Science & Technology. He has a wealth of experience spanning over two decades in the banking industry, having worked in various fields including Compliance & Internal Control, Risk Management and Branch Operations. Until his appointment as Head, Subsidiaries Risk Management at Access, he was responsible for Risk Management (Ghana) and served as Group Head for Operational Risk Management at Access Bank Plc. He previously worked at Citi Bank in Nigeria, Senegal and Kenya before joining Access Bank Plc in Mr. Ajimoko is a Fellow of the Institute of Chartered Accountant of Nigeria (ICAN) and a Certified Risk Specialist. He has attended several professional and leadership training programmes in leading Business Schools including Wharton School University of Pennsylvania, the London Business School (LBS) and INSEAD among others. 6

9 Annual Report CORPORATE GOVERNANCE (continued) Directors Responsibilities The Board is accountable and responsible for the performance and affairs of the Bank. The Board defines the Bank s strategic goals and ensures the effective deployment of human and financial resources towards the attainment of these goals. The Board is responsible for ensuring the proper management of the Bank through oversight of management performance to ensure protection and enhancement of shareholder value and attainment of the Bank s obligations to its employees and other stakeholders. The Board ensures that the Bank observes the highest ethical standards and carries on its business in accordance with the Bank s Regulations and in conformity with the laws of the Republic of Ghana. The Board defines a framework for the delegation of its authority or duties to management. Authority of the Board The Board is authorised to undertake the following functions: Formulation of policies and overseeing the management and conduct of the business; Formulation and management of the Risk Management Framework; Succession planning and the appointment, training, remuneration, performance appraisal and replacement of board members and senior management; Overseeing the effectiveness and adequacy of internal control systems; Overseeing the maintenance of the Bank s communication and information dissemination policy; Ensuring effective communication with shareholders; Ensuring the integrity of financial reports; Ensuring maintenance of ethical standards; Ensuring compliance with the laws of the Republic of Ghana. BOARD EFFECTIVENESS REVIEW The Board conducts an annual evaluation of its own performance, that of its committees, the chairman and individual directors. To effectively perform its oversight function and monitor management s performance, the Board meets at least once every quarter, with two additional meeting to focus on long-range strategies of the Bank. Every Director is required to attend all board meetings. Such attendance is a criteria for the re-nomination of a director except when there are cogent reasons which the Board must notify the shareholders of at the annual general meeting. In 2017, attendance by directors at the meetings of the Board and its committees are as stated below: Board Members Board Audit Risk Governance Credit Frank W. K. Beecham III 6/6 N/A N/A N/A N/A Abena Amoah 6/6 4/4 3/4 4/4 4/4 Ernest Mintah 6/6 4/4 4/4 N/A 4/4 Dela Selormey 6/6 4/4 4/4 4/4 4/4 Kris Ifeanyi Njoku 6/6 N/A 4/4 4/4 4/4 Joyce Dimkpa 6/6 4/4 4/4 4/4 4/4 Kolawole A. Ajimoko 6/6 N/A 4/4 4/4 4/4 Dolapo Ogundimu 6/6 N/A 4/4 4/4 4/4 7

10 Annual Report CORPORATE GOVERNANCE (continued) COMMITTEES OF THE BOARD To strengthen its corporate governance, the Board has in place the Audit, Governance, Credit and Risk Management Committee. Audit Committee The Audit Committee is chaired by Mr. Dela Selormey and has Abena Amoah, Joyce Dimkpa and Mr. Ernest Mintah as members. The Audit Committee assists the Board in fulfilling its oversight responsibility relating to; the integrity of the Bank s financial statements and the financial reporting process; the independence and performance of the Bank s internal and external auditors; and the Bank s system of internal control and mechanism for receiving complaints regarding the Bank s accounting and operating procedures. Credit Committee The Committee is made up of four Non-Executive Directors and Two (2) Executive Directors. The Committee is chaired by Ms. Abena Amoah and its members are Joyce Dimkpa, Kolawole Adjimoko, Mr. Ernest Mintah Mr. Dela Selormey, Ifeanyi Njoku and Dolapo Ogundimu. The Credit Committee has the responsibility of advising the Board on its oversight responsibilities in relation to the Bank s credit exposure and management, lending practices and provide strategic guidance for the development and achievement of the Bank s credit and lending objectives. Governance and Remuneration Committee The Committee has Joyce Dimpka as its Chairman, and Kolawole Adjimoko, Mr. Dela Selormey, Ifeanyi Njoku and Dolapo Ogundimu as its members. The objectives of the Governance and Remuneration Committee is to advise the Board on its oversight responsibilities in relation to compensation, benefits and all other human resource matters affecting the directors and employees of the Bank. Specifically, the Committee is responsible for determining and executing the processes for Board appointments, membership of the Board and recommending appropriate remuneration for directors (both executive and non-executive) and approving remuneration for all other staff. Risk Management Committee The Committee is made up of four (4) non executive and two (2) executive Board members with Mr. Dela Selormey as the Chairman and Abena Amoah, Joyce Dimkpa, Kolawole Adjimoko, Mr. Ernest Mintah, Ifeanyi Njoku and Dolapo Ogundimu as members. The Committee assists the Board in fulfilling its oversight responsibility relating to establishment of policies, standards and guidelines for risk management, and compliance with legal and regulatory requirements in the Bank. Its core functions are: i. Oversee the establishment of a formal written policy on the overall risk management system. The policy should define risks and risk limits that are acceptable and unacceptable to the Bank. It should provide guidelines and standards to administer the acceptance and on-going management of all risks; ii. Ensure that adequate policies are in place to manage and mitigate the adverse effects of both business and control risks in its operations; iii. Ensure compliance with established policy through periodic review of reports provided by management, internal and external (statutory) auditors and the supervisory authorities; iv. Ensure the appointment of qualified officers to manage the risk function; v. Oversee the functions of the Risk Management Department in the Bank; and vi. Re-evaluate the Risk Management Policy of the Bank on a periodic basis to accommodate major changes in internal or external factors. 8

11 INDEPENDENT AUDITOR S REPORT TO THE MEMBERS OF ACCESS BANK (GHANA) LIMITED REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS Our opinion In our opinion, the accompanying financial statements give a true and fair view of the financial position of Access Bank (Ghana) Limited (the Bank ) and its subsidiaries (together the Group ) as at 31 December 2017, and of the financial performance and the cash flows of the Bank standing alone and the Group for the year then ended in accordance with International Financial Reporting Standards and in the manner required by the Companies Act, 1963 (Act 179) and the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930). What we have audited We have audited the financial statements of Access Bank (Ghana Limited (the Bank ) and its subsidiaries (together the Group ) The financial statements on pages 14 to 76 comprise: the separate and consolidated statements of financial position as at 31 December 2017; the separate and consolidated statements of comprehensive income for the year then ended; the separate and consolidated statements of changes in equity for the year ended; the separate and consolidated statements of cash flows for the year then ended; and the notes to the separate and consolidated financial statements, which include a summary of significant accounting policies. 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 separate and consolidated financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We are independent of the Group in accordance with the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (IESBA Code). We have fulfilled our other ethical responsibilities in accordance with the IESBA Code. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. 9

12 INDEPENDENT AUDITOR S REPORT TO THE MEMBERS OF ACCESS BANK (GHANA) LIMITED (continued) Key audit matter The calculation of impairment of loans and advances to customers for the Bank is inherently judgemental. Individual and collective impairment provisions (identified and unidentified) may not reflect recent developments in credit quality and the historical loss experience of the loan portfolio. The directors make judgements over both the timing of recognition of impairment and the estimation of any such impairment. At year end the Bank reported total gross loans and advances of GH million (2016: GH 1.3 billion) and impairment provisions of GH 73 million (2016: GH 52.6 million). The key assumptions used in the impairment models are: - completeness and timing of recognition of loss events in accordance with criteria set out in IAS 39; - those relating to the valuation of the collateral securities used and their realisation periods (time to collect proceeds from the collateral securities), - ability to repossess collateral and recovery rates; - the emergence period (average period for impairment triggers or hidden loss events to be identified in a loan portfolio), - the loss given default (percentage exposure at risk that is not expected to be recovered in an event of default), and - the probability of default (estimate of the likelihood that a borrower will be unable to meet their debt obligations over a particular time horizon). The accounting policies, critical estimates and judgements and impairment charge are set out in notes 2.11, 4(a), 11 and 18 to the financial statements. How our audit addressed the key audit matter We updated our understanding of and evaluated key controls within the loan origination, approval, monitoring and recovery processes. We tested the design and operating effectiveness of key controls focusing on the following: - Identification of loss events, including early warning and default warning indicators; - Assessment and approval of individual impairment provisions; - Governance including model validation and the assessment of the suitability of the model, appropriateness of assumptions, and approval of provisions; and - Completeness and accuracy of data input into the model and provision calculations. For individually calculated impairment, we tested the loans and advances for which impairment triggers have been identified to assess whether the loss event had been identified appropriately. We examined a sample of loans and advances which had not been identified by management as potentially impaired and formed our own judgement. For specific impairment charges on individual loans, we tested the compilation of impaired loans, key assumptions applied such as the realisation period and those relating to the valuation of collateral securities and comparing estimates to external evidence where available. For collective impairment, we tested the appropriateness of the model used to determine the charge by reference to the Bank and market experience, the identification of loans to be included in the model and the key assumptions applied such as the emergence period, the loss given default and the probability of default. 10

13 INDEPENDENT AUDITOR S REPORT TO THE MEMBERS OF ACCESS BANK (GHANA) LIMITED (continued) Other information The directors are responsible for the other information. The other information comprises the Financial Highlights, Corporate Governance Report, Report of the Board of Directors, Shareholders Information, Other Financial Information and the Value Added Statement but does not include the separate and consolidated financial statements and our auditor s report thereon, which we obtained prior to the date of this auditor s report and the Chairman s Statement, Managing Director s Review Report, Report on how and where the Group does business, Business Review Report and the Sustainability Report which are expected to be made available to us after that date. Our opinion on the separate and consolidated financial statements does not cover the other information and we do not and will not express any form of assurance conclusion thereon. In connection with our audit of the separate and consolidated financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the separate and consolidated 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. When we read the Chairman s Statement, Managing Director s Review Report, Report on how and where the Group does business, Business Review Report and the Sustainability Report and we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance. Responsibilities of the directors for the financial statements The directors are responsible for the preparation of separate and consolidated 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 Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930), 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. In preparing the separate and consolidated financial statements, the directors are responsible for assessing the Bank and the Group 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 Bank and/or the Group or to cease operations, or have no realistic alternative but to do so. The directors are responsible for overseeing the Group s financial reporting process. 11

14 INDEPENDENT AUDITOR S REPORT TO THE MEMBERS OF ACCESS BANK (GHANA) LIMITED (continued) Auditor s responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the separate and consolidated 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 separate and consolidated financial statements. As part of an audit in accordance with ISAs, we exercise professional judgement 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 Group s 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 related to events or conditions that may cast significant doubt on the 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 separate and consolidated 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 Group 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 financial statements represent the underlying transactions and events in a manner that achieves fair presentation; and Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the separate and consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with 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 directors with a statement that we have complied with relevant ethical requirements regarding independence, and have communicated 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 directors, we determine those matters that were of most significance in the audit of the financial statements of the current period 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 public interest benefits of such communication. 12

15 REPORT OF THE INDEPENDENT AUDITOR TO THE MEMBERS OF ACCESS BANK (GHANA) LIMITED (continued) REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS The Companies Act, 1963 (Act 179) requires that in carrying out our audit we consider and report on the following matters. We confirm that: i) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit; ii) in our opinion proper books of account have been kept by the Bank, so far as appears from our examination of those books; and iii) the Group s balance sheet (Group s statement of financial position) and Group s profit and loss account (part of the Group s statement of comprehensive income) are in agreement with the books of account. In accordance with section 85(2) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930) we hereby confirm that: i) in our opinion, the accounts give atrue and fair view of the state of affairs of the Bank and the results of operations for the period under review; ii) we were able to obtain all the information and explanations required for the efficient performance of our duties as auditor; iii) in our opinion, the Bank s transactions were within its powers iv) in our opinion, the Bank has, in all material respects, complied with the provisions of this Act; and v) in our opinion, the Bank has in all material respects complied with the provisions of the Anti-Money Laundering Act, 2008 (Act 749) (as amended), the Anti-Terrorism Act, 2008, (Act 762) and the Regulations made under these enactments. The engagement partner on the audit resulting in this independent auditor s report is Oseini Amui (ICAG/P/1139). PricewaterhouseCoopers (ICAG/F/2018/028) Chartered Accountants Accra, Ghana 27 March

16 STATEMENT OF COMPREHENSIVE INCOME (All amounts are in thousands of Ghana Cedis) Year ended 31 December The Group The Bank Note Interest income 7 411, , , ,068 Interest expense 7 (196,001) (215,208) (196,001) (215,208) Net interest income 215, , , ,860 Commission and fees 8 18,080 36,021 18,080 36,021 Net trading income 9 34,219 34,927 34,219 34,927 Other operating income 10 2,981 2,836 2,969 2,812 Total operating income 270, , , ,620 Impairment loss on financial assets 11 (40,816) (55,702) (40,816) (55,702) Personnel expenses 12 (62,576) (58,050) (62,576) (58,050) Depreciation and amortisation 19 (17,217) (14,793) (17,217) (14,793) Other operating expenses 13 (91,144) (75,029) (91,142) (75,026) Profit before tax 58,597 69,070 58,587 69,049 Income tax expense 14 (28,998) (27,121) (28,995) (27,115) Profit after tax 29,599 41,949 29,592 41,934 Other comprehensive income Items that may be reclassified to profit or loss Change in fair value of availablefor-sale financial assets, net of tax 28 10,597 1,200 10,597 1,200 Total comprehensive income for the year 40,196 43,149 40,189 43,134 Profit is attributable to: - Controlling interest 40,196 43, Earnings per share Basic and diluted (Ghana pesewas) The notes on pages 19 to 76 are an integral part of these financial statements. 14

17 STATEMENT OF FINANCIAL POSITION (All amounts are in thousands of Ghana Cedis) Assets At 31 December The Group The Bank Note Cash and cash equivalents 16 1,107, ,355 1,107, ,355 Investment securities , , , ,801 Loans and advances to customers ,675 1,285, ,675 1,285,612 Investment other than securities Property and equipment , , , ,356 Intangible assets 20 4,206 5,992 4,206 5,992 Deferred income tax asset 21 2,517 13,163 2,517 13,163 Other assets , , , ,309 Total assets 3,199,809 2,679,839 3,199,566 2,679,608 Liabilities Deposits from banks , ,294 - Deposits from customers 25 2,131,482 2,009,099 2,131,529 2,009,146 Borrowings , , , ,668 Current income tax 14 19,891 16,515 19,721 16,348 Deferred income tax liabilities 21 8,161 4,564 8,161 4,564 Other liabilities 27 41,895 16,431 42,796 17,334 Total liabilities 2,730,051 2,250,277 2,730,829 2,251,060 Equity Stated capital , , , ,738 Statutory reserve , , , ,881 Credit risk reserve , , , ,624 Income surplus 28 44,319 14,119 43,298 13,105 Fair value reserve 28 11,797 1,200 11,797 1,200 Total equity 469, , , ,548 Total equity and liabilities 3,199,809 2,679,839 3,199,566 2,679,608 The notes on pages 19 to 76 are an integral part of these financial statements. The financial statements on pages 14 to 76 were approved by the Board of Directors on 9 March 2018 and signed on its behalf by... Frank Beecham Chairman... Dolapo Ogundimu Managing Director 15

18 STATEMENT OF CHANGES IN EQUITY (All amounts are in thousands of Ghana Cedis) The Group Year ended 31 December 2017 Stated capital Fair value reserve Statutory reserve Credit risk reserve Income surplus Total At 1 January ,738 1, , ,624 14, ,562 Profit for the year ,599 29,599 Changes in fair value of available-for-sale financial assets, net of tax - 10, ,597 Total comprehensive income - 10, ,599 40,196 Transfer from credit risk reserve (7,999) 7,999 - Transfer to statutory reserve - - 7,398 - (7,398) - Total transactions with owners - - 7,398 (7,999) At 31 December ,738 11, , ,625 44, ,758 Year ended 31 December 2016 At 1 January , ,394 75,758 54, ,950 Profit for the year ,949 41,949 Changes in fair value of available-for-sale financial assets, net of tax - 1, ,200 Total comprehensive income - 1, ,949 43,149 Transfer to credit risk reserve ,866 (71,866) - Transfer to statutory reserve ,487 - (10,487) - Proceeds from issue of shares 26, ,463 Total transactions with owners 26,463-10,487 71,866 (82,353) 26,463 At 31 December ,738 1, , ,624 14, ,562 The notes on pages 19 to 76 are an integral part of these financial statements. 16

19 STATEMENT OF CHANGES IN EQUITY (All amounts are in thousands of Ghana Cedis) The Bank Year ended 31 December 2017 Stated capital Fair value reserve Statutory reserve Credit risk reserve Income surplus Total At 1 January ,738 1, , ,624 13, ,548 Profit for the year ,592 29,592 Changes in fair value of available for sale financial assets, net of tax - 10, ,597 Total comprehensive income - 10, ,592 40,189 Transfer from credit risk reserve (7,999) 7,999 - Transfer to statutory reserve - - 7,398 - (7,398) - Total transactions with owners - - 7,398 (7,999) At 31 December ,738 11, , ,625 43, ,737 Year ended 31 December 2016 At 1 January , ,394 75,758 53, ,951 Profit for the year ,934 41,934 Changes in fair value of available for sale financial assets, net of tax - 1, ,200 Total comprehensive income - 1, ,934 43,134 Transfer to credit risk reserve ,866 (71,866) - Transfer to statutory reserve ,487 - (10,487) - Proceeds from issue of share 26, ,463 Total transactions with owners 26,463-10,487 71,866 (82,353) 26,463 At 31 December ,738 1, , ,624 13, ,548 The notes on pages 19 to 76 are an integral part of these financial statements. 17

20 STATEMENT OF CASH FLOWS (All amounts are in thousands of Ghana Cedis) Year ended 31 December The Group The Bank Note Cash flows from operating activities Profit before tax 58,597 69,070 58,587 69,049 Adjustments for: Depreciation of property, plant and equipment 19 13,576 11,883 13,576 11,883 Amortisation of intangible assets 20 3,641 2,910 3,641 2,910 Interest expense on borrowings 26 13,921 8,660 13,921 8,660 Impairment on loans and advances 40,816 55,702 40,816 55,702 Profit on disposal of property and equipment 19 (55) (193) (55) (193) Change in loans and advances 367,121 (129,489) 367,121 (129,489) Change in investment securities (578,238) 191,249 (578,238) 191,249 Change in other assets (66,618) (42,542) (66,606) (42,518) Change in deposits from customers 122, , , ,919 Change in deposits from banks 187,294 (162,852) 187,294 (162,852) Change in other liabilities 25,464 (36,203) 25,462 (36,205) Change in mandatory reserve deposit (12,238) (28,287) (12,238) (28,287) Effects of exchange rate changes on cash held (42,317) (20,218) (42,317) (20,218) Exchange loss on borrowings 26 6,366 15,085 6,366 15,085 Tax paid 14 (14,911) (32,074) (14,911) (32,074) Net cash generated from operating activities 124, , , ,621 Cash flows from investing activities Purchase of property and equipment 19 (25,639) (32,658) (25,639) (32,658) Purchase of intangible assets 20 (1,586) (2,758) (1,586) (2,758) Proceeds from sale of property and equipment , ,981 Net cash used in investing activities (26,439) (32,435) (26,439) (32,435) Cash flows from financing activities Drawdown on borrowings ,496 94, ,496 94,732 Repayment of borrowings 26 (171,123) (20,181) (171,123) (20,181) Proceeds from issue of shares 28-26,463-26,463 Net cash generated from financing activities 117, , , ,014 Net increase in cash and cash equivalents 215, , , ,200 Effects of exchange rate changes on cash held 42,317 20,218 42,317 20,218 Cash and cash equivalents at 1 January , , , ,788 Cash and cash equivalents at 31 December 16 1,076, ,206 1,076, ,206 The notes on pages 19 to76 are an integral part of these financial statements. 18

21 NOTES 1. Reporting entity Access Bank (Ghana) Limited (the Bank) is a public limited liability company incorporated in Ghana licensed to carry out universal banking. The address of the Bank s registered office is Starlets 91 Road, Opposite Accra Sports Stadium, P. O. Box GP 353, Osu Accra. The consolidated financial statements of the Bank as at, and for the year ended 31 December 2017 comprises the Bank and its subsidiary BTH Limited (together as the Group). The Group s principal activity is corporate and retail banking as well as leasing operations. The Bank is listed on the Ghana Stock Exchange and has Access Bank Plc incorporated in the Federal Republic of Nigeria as its majority shareholder. For Companies Act, 1963 (Act 179) reporting purposes, the balance sheet is represented by the statement of financial position and the profit and loss account by part of the income statement, in these separate and consolidated financial statements ( financial statements ). 2. Summary of significant accounting policies The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. 2.1 Basis of preparation The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. The financial statements have been prepared under the historical cost convention except as disclosed in the accounting policy below. Additional information required under the Companies Act, 1963 (Act 179) and the Banks and Specialised Deposit- Taking Institutions Act, 2016 (Act 930) have been included, where appropriate. 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 group s accounting policies. 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. These financial statements are presented in Ghana Cedi, which is the Group s functional currency. 2.2 Changes in accounting policies and disclosures (a) New standards, amendments and interpretations adopted by the group The following amendments and International Financial Reporting Interpretation Committee (IFRIC) interpretations were adopted by the Bank for the first time for the financial year beginning on or after 1 January 2017 and have an impact on the Bank s financial statements. 19

22 2. Summary of significant accounting policies (continued) 2.2 Changes in accounting policies and disclosures (continued) (a) New and amended standards not yet adopted by the Bank (continued) Amendments to IAS 7 Statement of cash flows - Disclosure initiative Going forward, entities will be required to explain changes in their liabilities arising from financing activities. This includes changes arising from cash flows (e.g. drawdowns and repayments of borrowings) and noncash changes such as acquisitions, disposals, accretion of interest and unrealised exchange differences. Changes in financial assets must be included in this disclosure if the cash flows were, or will be, included in cash flows from financing activities. This could be the case, for example, for assets that hedge liabilities arising from financing liabilities. Entities may include changes in other items as part of this disclosure, for example by providing a net debt reconciliation. However, in this case the changes in the other items must be disclosed separately from the changes in liabilities arising from financing activities. The information may be disclosed in tabular format as a reconciliation from opening and closing balances, but a specific format is not mandated. Amendments to IAS 12 - Recognition of Deferred Tax Assets for Unrealised Losses The amendments clarify the accounting for deferred tax where an asset is measured at fair value and that fair value is below the asset s tax base. Specifically, the amendments confirm that: A temporary difference exists whenever the carrying amount of an asset is less than its tax base at the end of the reporting period. An entity can assume that it will recover an amount higher than the carrying amount of an asset to estimate its future taxable profit. Where the tax law restricts the source of taxable profits against which particular types of deferred tax assets can be recovered, the recoverability of the deferred tax assets can only be assessed in combination with other deferred tax assets of the same type. Tax deductions resulting from the reversal of deferred tax assets are excluded from the estimated future taxable profit that is used to evaluate the recoverability of those assets. (b) New and amended standards not yet adopted by the Bank A number of new standards and amendments to standards and interpretations are effective for annual periods beginning after 1 January 2018, and have not been applied in preparing these financial statements. None of these is expected to have a significant effect on the consolidated financial statements of the Group, except the following set out below: 20

23 2. Summary of significant accounting policies (continued) 2.2 Changes in accounting policies and disclosures (continued) (b) New and amended standards not yet adopted by the Bank (continued) IFRS 15, Revenue from contracts with customers deals with revenue recognition and establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity s contracts with customers. Revenue is recognised when a customer obtains control of a good or service and thus has the ability to direct the use and obtain the benefits from the good or service. The standard replaces IAS 18 Revenue and IAS 11 Construction contracts and related interpretations. The standard is effective for annual periods beginning on or after 1 January 2018 and earlier application is permitted. The Bank is yet to assess IFRS 15 s full impact. IFRS 16, Leases sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract, that is the customer (lessee) and the supplier (lessor). IFRS 16 is effective from 1 January, 2019 and the group can choose to apply IFRS 16 before that date but only if it also applies IFRS 15 Revenue from Contracts with Customers. IFRS 16 replaces the previous leases standard, IAS 17 Leases and related interpretations. The Bank is yet to assess IFRS 16 s full impact. IFRS 9, Financial instruments published in July 2014, replaces the existing guidance in IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9 includes revised guidance on the classification and measurement of financial instruments, including a new expected credit loss model for calculating impairment on financial assets, as well as new general hedge accounting requirements. It also carries forward the guidance on recognition and derecognition of financial instruments from IAS 39. IFRS 9 is effective for annual reporting periods beginning on or after 1 January Based on an initial assessment carried as at 31 December 2017, the impact of the implementation of IFRS 9 is as follows: Classification and measurement IFRS 9 requires all financial assets, except equity instruments and derivatives, to be assessed based on a combination of the entity s business model for managing the assets and the instruments contractual cash flow characteristics. The IAS 39 measurement categories will be replaced by: fair value through profit or loss (FVPL), fair value through other comprehensive income (FVOCI), and amortised cost. IFRS 9 will also allow entities to continue to irrevocably designate instruments that qualify for amortised cost or fair value through OCI instruments as FVPL, if doing so eliminates or significantly reduces a measurement or recognition inconsistency. Equity instruments that are not held for trading may be irrevocably designated as FVOCI, with no subsequent reclassification of gains or losses to the income statement. The accounting for financial liabilities will largely be the same as the requirements of IAS 39, except for the treatment of gains or losses arising from an entity s own credit risk relating to liabilities designated at FVPL. Such movements will be presented in OCI with no subsequent reclassification to the income statement, unless an accounting mismatch in profit or loss would arise. 21