SUNTRUST SAVINGS AND LOANS LIMITED RC

Transcription

1 SUNTRUST SAVINGS AND LOANS LIMITED RC SUMMARISED FINANCIAL STATEMENTS BALANCE SHEET AS AT DECEMBER 31, N 000 USE OF FUNDS Cash and short-terms funds 12,059 Due from banks and other financial Institutions 580,092 Placements 815,476 Investment properties 1,153,337 Loans and advances 1,009,534 Other assets 259,958 Fixed assets 307,827 TOTAL ASSETS 4,138,283 LIABILITIES Deposit and current accounts 3,205,032 Other liabilities 160,269 TOTAL LIABILITIES 3,365,301 CAPITAL AND RESERVES Paid-up share capital 1,000,000 General reserve (227,018) SHAREHOLDERS FUNDS 772,982 TOTAL LIABILITIES & SHAREHOLDERS FUNDS 4,138,283 These are the first financial statements since the company commenced operations, hence there are no comparative figures. PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED DECEMBER 31, N 000 Gross earnings 250,061 Interest and similar income 189,264 Interest and similar expenses (112,373) Net Interest income 76,891 Commissions & other income 60,798 Operating income 137,689 Operating expenses (184,823) Depreciation (130,426) Provision for risk assets (10,702) Pre-operation expenses (38,756) Loss before taxation (227,018) Taxation - Loss after taxation (227,018) APPROPRIATIONS Transferred to statutory reserve - Transferred to general reserve (227,018) (227,018) Approved by the Board of Directors on March 23, 2011 and signed on its behalf by: Hamza Sule Wuro-Bokki (Director) Muhammad Jibrin (Managing Director/CEO) INDEPENDENT AUDITORS REPORT ON THE SUMMARISED FINANCIAL STATEMENTS We have audited the full financial statements of Suntrust Savings and Loans Limited for the year ended December 31, in accordance with International Standards on Auditing. In our report dated March 23, 2011, we expressed an unqualified opinion on the full financial statements from which these summarised financial statements were derived. In our opinion, the summarised financial statements are consistent, in material respects, with the full financial statements from which they were derived. For a better understanding of the company s financial position and the results of the operations for the year ended December 31, and the scope of our audit, the summarised financial statements should be read in conjunction with the full financial statements. Report on other legal and regulatory requirements There were no related party transactions and balances as defined in Central Bank of Nigeria Circular BSD/1/2004 during the year. No contravention of the Banks and Other Financial Institutions Act, CAP B3 Laws of the Federation of Nigeria 2004 was brought to our attention during the audit of the full financial statements for the year ended December 31,. Abuja, Nigeria. March 23, 2011 Chartered Accountants DIRECTORS: Kenneth Ofili (Chairman), Muhammad Jibrin (Managing Director/ Chief Executive Officer), Yunusa Yakubu, Hamza Sule Wuro-Bokki, Abubakar Sadiq Mohammed, Nasiru A. Dantata

2 SUNTRUST SAVINGS AND LOANS LIMITED REPORT OF THE DIRECTORS AND AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, CONTENTS Directors and Advisers Report of the Directors PAGE 2 3 Audited Financial Statements: -Report of the Independent Auditors -Statement of Significant Accounting Policies -Balance Sheet -Profit and Loss Account -Statement of Cash Flows -Notes to the Financial Statements -Statement of Value Added

3 SUNTRUST SAVINGS AND LOANS LIMITED DIRECTORS AND ADVISERS FOR THE YEAR ENDED DECEMBER 31, DIRECTORS: Kenneth Ofili Muhammad Jibrin Yunusa Yakubu Hamza Sule Wuro-Bokki Abubakar Sadiq Mohammed Nasiru A. Dantata - Chairman - Managing Director/CEO - Director - Director - Director - Director COMPANY SECRETARY Omega Reigns Chambers REGISTERED OFFICE: 6, Dar-Es-Salaam Street Off Aminu Kano Crescent Wuse II Abuja AUDITORS: Aminu Ibrahim & Co. [Chartered Accountants] City Plaza, 3rd Floor Plot 596 Ahmadu Bello Way Garki II, Abuja 2

4 SUNTRUST SAVINGS AND LOANS LIMITED REPORT OF THE DIRECTORS FOR THE YEAR ENDED DECEMBER 31, The Directors have pleasure in presenting to the members of bank their report and the audited financial statements for the year ended December 31,. CORPORATE STRUCTURE AND BUSINESS The Bank was incorporated on February 12, 2009 as a Private Limited Liability Company in accordance with the provisions of the Companies and Allied Matters Act. It was licensed to operate as a Mortgage Institution in March 2009 and commenced operations in January. It is wholly owned by Nigerian corporate and individual citizens. RESULT The Bank s results are shown as follows: Loss after taxation Less: Appropriations Transfer to statutory reserve Loss for the period transferred to general reserve N , ,018 ======= PRINCIPAL ACTIVITIES The Bank engages in the business of mortgage banking. STATE OF AFFAIRS In the opinion of the Directors, the state of the Bank's affairs is satisfactory and no event has occurred since the balance sheet date, which would affect the financial statements as presented. FIXED ASSETS Information relating to changes in fixed assets is given in Note 8 to the financial statements. 3

5 SUNTRUST SAVINGS AND LOANS LIMITED REPORT OF THE DIRECTORS FOR THE YEAR ENDED DECEMBER 31, DIRECTORS' INTERESTS The interest of the Directors in the issued share capital of the Bank as recorded in the register of Director s holding as at December 31, are as follows: Names Units Abubakar Saddiq Mohammed 50,000,000 Hamza Sule Wuro-Bokki 50,000,000 Kenneth Ofili 50,000,000 SIGNIFICANT SHAREHOLDERS Names % holdings Abubakar Saddiq Mohammed 5 Hamza Sule Wuro-Bokki 5 Kenneth Ofili 5 Tijara Resources Limited 10 Pinnacle Prime Concepts & Investments Limited 25 Midland Corporate Investments Limited 50 RESPONSIBILITIES OF DIRECTORS In accordance with the provisions of sections 334 and 335 of the Companies and Allied Matters Act and the requirements of Bank and Other Financial Institutions Act Directors are responsible for the preparation of financial statements which give a true and fair view of the state of affairs of the Bank as at the end of the financial year and of its financial performance for the year and comply with the provisions of the Act. These responsibilities include ensuring that: i) adequate internal control procedures are instituted to safeguard assets and prevent and detect fraud and other irregularities; ii) proper accounting records are maintained; iii) applicable accounting standards are followed; iv) suitable accounting policies are used and consistently applied; v) the financial statements are prepared on a going concern basis unless it is inappropriate to presume that the Company will continue in business. 4

6 SUNTRUST SAVINGS AND LOANS LIMITED REPORT OF THE DIRECTORS FOR THE YEAR ENDED DECEMBER 31, EMPLOYEES INVOLVEMENT The Bank is committed to keeping employees fully informed as far as possible regarding the Bank s performance and progress and seeking their views wherever practicable on matters, which particularly affect them as employees. Management, professional and technical expertise are the Bank s major assets and investment in developing such skills continues. EMPLOYMENT OF DISABLED PERSONS No disabled person was employed by the Bank during the year. It is however the Bank's policy to consider disabled persons for employment if academically and medically qualified. HEALTH, SAFETY OF EMPLOYEES Health and safety regulations are enforced within the Bank s premises and employees are aware of the safety regulations. DONATION The Bank did not make any donation during the year. AUDITORS Messrs Aminu Ibrahim & Co. was appointed as auditors during the year and have expressed their willingness to continue in office as auditors in accordance with Section 357(2) of the Companies and Allied Matters Act, CAP C20 Laws of the Federation of Nigeria BY ORDER OF THE BOARD 5

7 Aminu Ibrahim & Co City Plaza, 3rd Floor Plot 596, Ahmadu Bello Way P.O. Box 971, Garki II, Abuja, Nigeria Tel: , REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF SUNTRUST SAVINGS & LOANS LIMITED Report on the Financial Statements We have audited the accompanying financial statements of Suntrust Savings & Loans Limited which comprise the balance sheets as at December 31, and the profit and loss accounts and cash flow statements for the year then ended and a summary of significant accounting policies on pages 8 to 10 and other explanatory notes on pages 14 to 24. Directors' Responsibility for the Financial Statements The Directors are responsible for the preparation and fair presentation of these financial statements. This responsibility includes designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of financial statements that are free of material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditors Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing and Nigerian Standards on Auditing issued by the Institute of Chartered Accountants of Nigeria, which require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements give a true and fair view of the financial position of Suntrust Savings & Loans Limited as at 31 December, and of its financial performance and its cash flows for the year then ended in accordance with relevant accounting standards issued by the Nigerian Accounting Standards Board, relevant circulars issued by the Central Bank of Nigeria, Companies and Allied Matters Act, CAP C20 Laws of the Federation of Nigeria 2004 and the Banks and Other Financial Institutions Act, CAP B3 Laws of the Federation of Nigeria

8 Aminu Ibrahim & Co Report on Compliance with Banking Regulations We confirm that our examination of loans and advances was carried out in accordance with the Prudential Guidelines for Licensed Banks issued by the Central Bank of Nigeria. There were no related party transactions and balances as defined in Central Bank of Nigeria Circular BSD/1/2004 during the year. Contraventions No contravention of the Banks and Other Financial Institutions Act, CAP B3 Laws of the Federation of Nigeria 2004 was brought to our attention during the audit of the financial statements for the year ended December 31,. 7

9 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES FOR THE YEAR ENDED DECEMBER 31, The accounting policies adopted in the preparation of these financial statements are set out below: a) Basis of accounting The financial statements have been prepared under the historical cost convention and comply with the Statements of Accounting Standards issued by the Nigerian Accounting Standards Board. b) Fixed Assets Fixed assets are stated at costs less accumulated depreciation. Depreciation is calculated on straight line basis to write-off the cost of assets over their estimated useful lives as following: % Office furniture, fitting and equipment Computer hardware and software Motor vehicles Plant and machinery No depreciation is provided on assets under construction. Gain or loss arising from the disposal of fixed assets is included in the profit and loss account. c) Loans and advances Credit facilities are stated after deduction of provision against debts considered doubtful of recovery. They are classified as either performing or non-performing. Non-performing are those with principal and/or interest payment obligation in arrears for over three months. Specific provision are made on all non-performing balances and 1% general provision on performing balances in line with Central Bank of Nigeria s prudential guidelines. Provisions are applied to write off advances when securities have been realized and further recoveries are considered to be unlikely. When securities are realized, the loan provisions previously suspended are released as income in the profit and loss account in the period of realization. 8

10 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES Continued FOR THE YEAR ENDED DECEMBER 31, d) Income recognition Interest, commission and other income are recognized when due, and accounted for on accrual basis. Interest accruing on non-performing account is not earned but taken to interest in suspense until the debts are recovered. e) Investments (f) Long-term investments are carried at cost. Where a permanent decline in value occurs, the carrying amount of the asset is reduced to recognise the loss. Short term investments are carried at the lower of cost and net realisable value. Foreign Currency Transactions Transactions in foreign currencies are translated to the Naira at the rates of exchange ruling at the dates of the transactions. Foreign currency balances are converted to the Naira at the rate of exchange ruling at the balance sheet date and resultant profit and loss on exchange is taken to the profit and loss account. g) Deferred Taxation Provision for deferred taxation is made by the liability method and calculated at the current rate of taxation on the difference between the net book value of qualifying fixed assets and their corresponding tax written down value. h) Retirement benefits Arrangements for retirement benefits for members of staff are based on the provisions of the National Pension Reform Act. The matching contribution by the Company is based on current basic salaries and designated allowances and it is charged to profit and loss account. i) Off Balance Sheet transactions Transactions to which there are no direct balance sheet risks to the bank are reported and accounted for as off balance sheet transactions and shown by way of notes to the financial statements. 9

11 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES Continued FOR THE YEAR ENDED DECEMBER 31, j) Investment properties Investment properties which are held for capital appreciation and subsequent disposal, are measured initially at their cost, including transaction costs. Subsequent to initial recognition, investment properties are carried at their market value and revalued periodically on a systematic basis at least once in every three years. Investment properties are not subject to periodic charge for depreciation. An increase in the carrying amount arising from the revaluation of investment property is credited to the shareholders fund as revaluation reserve. 10

12 BALANCE SHEET AS AT DECEMBER 31 ASSETS Cash and short-term funds 2 Due from banks and other financial institutions 3 Placements 4 Investment properties 5 Loans and advances 6 Other assets 7 Fixed assets 8 TOTAL ASSETS Note LIABILITIES Deposit and current accounts 9 Other liabilities 11 DECEMBER 31 12, , ,476 1,153,337 1,009, , ,827 4,138,283 3,205, ,269 3,365,301 CAPITAL AND RESERVES Share capital 12 General reserve 14 SHAREHOLDER'S FUNDS TOTAL LIABILITIES AND SHAREHOLDERS' FUNDS 1,000,000 (227,018) 772,982 4,138,283 The financial statements on pages 8 to 24 were approved by the Board of Directors on 23 March 2011 and signed on its behalf by: 11

13 PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED DECEMBER 31, Note DECEMBER 31, Gross earnings 250,061 Interest income Interest expense Interest margin , (112,373) 76,891 Commissions and other income Operating income Operating expenses Pre-operation expenses Depreciation Provision for risk assets Loss before taxation 17 60, , (184,823) (38,756) 8 (130,426) 19 (10,702) (227,018) Taxation Loss after taxation 10 - (227,018) Appropriations: Transfer to statutory reserve Transfer to general reserve (227,018) (227,018) Earning per share (kobo) -Basic 21 (23) 12

14 STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31 Note DECEMBER 31, Cash flows from operating activities Interest received Commission and other income received Interest expenses paid Cash payment to employees and suppliers Provision on doubtful balances Operating profit before changes in operating assets and liabilities 189,264 60,798 (112,373) (223,579) (10,702) (96,592) Changes in operating assets/liabilities Loans and advances Other assets Deposit and current accounts Other liabilities Net cashflow from operating activities Cash flows from investing activities Purchase of investments Purchase of fixed assets Net cash used in investing activities Cash flows from financing activities Proceeds from issue of shares Net cashflow from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at 1 January Cash and cash equivalents at 31 December (1,009,534) (259,958) 3,205, , ,999,217 (1,153,337) 8 (438,253) (1,591,590) 1,000,000 1,000,000 1,407, ,407,627 13

15 NOTES TO THE FINANCIAL STATEMENTS 1. The bank Sun Trust Savings & Loans Plc was incorporated on 12 February 2009 as a Private Limited Liability Company in accordance with the provisions of the Companies and Allied Matters Act, It was licensed to operate as a Mortgage Institution in March 2009 and commenced operations in January. December 31, 2. Cash and short term funds Cash 12, Due from banks and other financial institutions Local banks 580, Placements Placements with banks in Nigeria 815, Cash and cash equivalents Cash and short-term funds (note 2) Balances with banks and other financial institutions (note 3) Placements (note 4) 12, , ,476 1,407,627 5 Investment Properties Acquired during the year 1,153,337 These are real estates purchased for resale at a later date and are stated at cost 14

16 NOTES TO THE FINANCIAL STATEMENTS December 31, 6. Loans and advances 6.1 Analysis of loans and advances by quality Performing 1,014,681 Sub-standard 5,556 1,020,237 Less Provision - General (10,146) - Sub-standard (556) 1,009, Analysis of loans and advances by security Real estate Otherwise secured Gross loans 803, ,262 1,020, Maturity profile of loans and advances Under 1 month 1-3 months Over 12 months 26, , ,682 1,020, Analysis of loans and advances by nature Term loans Overdrafts Others 803, , ,020, Insider-related credits There were no insider-related credits as at December 31,. 15

17 NOTES TO THE FINANCIAL STATEMENTS (Continued) 7. Other assets Interest receivable 24,229 Prepayments 230,438 Stationery stock 4,523 Accounts receivable clearing house , Fixed assets Cost: Acquired during the year At December 31, Depreciation: Charge during the year At December 31, Net Book Value At December 31, Plants & Furniture & Software & Motor Office Total Machinery Fittings Computer vehicles Equipment 13,280 30, ,465 11,500 1, ,253 13,280 30, ,465 11,500 1, ,253 2,723 4, ,712 2, ,426 2,723 4, ,712 2, ,426 10,557 25, ,753 8,625 1, ,827 16

18 NOTES TO THE FINANCIAL STATEMENTS (Continued) December 31, 9. Deposit, current and other accounts.1 Summary In Nigeria: Term Demand Savings 1,752,446 1,438,624 13,962 3,205,032.2 The maturity profile of deposit liabilities is as follows: Under 1 month 6-12 months Over 12 months 13,962 1,438,624 1,752,446 3,205, Taxation The company is not liable to company income tax, education tax and information technology levy as a result of the operating loss made during the year. It is also not liable to minimum tax because it is less than four years in operation. The charge for taxation in these financial statements is based on the provisions of the Companies Income Tax Act. The charge for education tax is based on the provisions of the Education Tax Act. Section 12(2a) of the Nigerian Information Technology Development Agency (NITDA) Act 2007 stipulates that, specified companies contribute 1% of their profit before tax to the Nigerian Information Technology Development Agency. 17

19 NOTES TO THE FINANCIAL STATEMENTS (Continued) December 31, 11. Other liabilities Deposit for shares 80,000 Account payable 5,183 Interest payable 13,176 Accruals 5,000 Managers' cheques 6,416 Uncleared effects 50, , Share capital.1 Authorised: 2,000,000,000 ordinary shares of N1 each 2,000,000.2 Issued, called up and fully paid: Issued during the year 1,000,000 At 31 December 1,000, Statutory reserve Appropriation from the profit and loss account 0 At 31 December 0 There is no appropriation to statutory reserve because the bank made a loss. The statutory reserve is computed at 20% of profit after tax in accordance with the Guidelines for Primary Mortgage Institutions issued by Other Financial Institutions Department of Central Bank of Nigeria. 14. General reserve Appropriation from the profit and loss account (227,018) At 31 December (227,018) 18

20 NOTES TO THE FINANCIAL STATEMENTS (Continued) December 31, 15. Interest earnings a. This is analysed by source and income type as follows: Bank sources: - Interest on placements 43,542 Non-Bank sources: - Interest on loans and advances 145, ,264 b. Geographical location: Earned in Nigeria 189, Interest expense.a Interest expense comprises: - Demand Time deposits 112,143 - Savings ,373.b Geographical location: Paid in Nigeria 112, Commissions and other income Commission on turnover 18,629 Loans management fees 41,866 Administrative and processing charges ,798 19

21 NOTES TO THE FINANCIAL STATEMENTS (Continued) December 31, 18. Operating expenses 1. Summary: Staff and other related costs Directors' emolument Auditors remuneration Other operating expenses 31,750-2, , , Provision for risk assets Loans and advances - General (note 6.6 ) - Sub-standard (note 6.6) 10, , Profit before tax This is stated after charging: Directors' emoluments - Auditors remuneration 2, Basic Earnings per share Basic earnings per share are calculated based on the profit after tax and the number of ordinary shares issued and paid up at 31 December Loss for the year attributable to shareholders () (227,018) Weighted average number of ordinary share (in thousand) 1,000,000 Earnings per share (Kobo) - basic (23) 20

22 NOTES TO THE FINANCIAL STATEMENTS (Continued) December 31, 22. Reconciliation of profit after tax to net cash provided by operating activities Loss after taxation (227,018) Adjustments to reconcile profit after tax to net cash (utilised)/provided by operating activities: Depreciation of fixed assets 130,426 Changes in assets and liabilities Increase in loans and advances Increase in other assets Increase in deposit and other current accounts (Decrease)/increase in other liabilities Net cash flow from operating activities (1,009,534) (259,958) 3,205, ,269 1,999, Emolument of Directors.1 Emoluments: Fees Other emoluments 0 0 Aggregate emoluments 0 The Chairman's fees amounted to 0 Highest paid Director (Executive) 3,000,000 21

23 SUNTRUST SAVINGS & LOANS LTD NOTES TO THE FINANCIAL STATEMENTS (Continued) December Emolument of Directors (Cont'd).2 The table below shows the number of Directors of the Bank (excluding the chairman) whose remuneration (excluding pension contributions) in respect of services to the Bank fell within the ranges shown below. Number N2,000,001 - N3,000,000 1 Above N 3,000,001 0 Number of directors who had no emoluments Employees.1 The average number of persons employed (excluding Directors) in the Bank during the year as follows: - Senior staff 5 - Junior staff The related staff costs were: Staff costs 31,750 22

24 NOTES TO THE FINANCIAL STATEMENTS (Continued) December 31, 26. Post balance sheet events There are no significant post balance sheet events which could have had a material effect on the state of affairs of the Bank as at 31 December, and on the loss for the year ended on that date which have not been adequately provided for or disclosed. 27. Claims and litigations There were no contingent liabilities in respect of claims and litigation against the Bank as at 31 December. 28. Guarantees and other financial commitments The Directors are of the opinion that all known liabilities and commitments which are relevant in the assessment of the state of financial affairs of the Bank have been taken into consideration in the preparation of these financial statements. 29. Comparative figures These financial statements are the first set of accounts since the company commenced operation hence there are no comparative figures. 30. Contraventions The Bank did not contravene any section of the Banks and Other Financial Institutions Act during the year. 31. Sections 355 (8) and (9) of the Companies and Allied Matters Act In accordance with banking traditions, the assets and liabilities have been shown in decreasing order of liquidity and without sub-classifications as between fixed and current assets unlike the formats applied by the Act. Subject to the foregoing, the format used gives the information required by the Act substantially in accordance therewith. 23

25 NOTES TO THE FINANCIAL STATEMENTS (Continued) 32. LIQUIDITY RISK MATURITIES OF ASSETS AND LIABILITIES 0-30 days 1-3 months 3-6 months 6-12 months Over 1 year Total MATURITIES OF ASSETS AND LIABILITIES Assets Cash and other short term funds 12,059 Due from other banks and financial institutions 580,092 Placements Loans and advances 26,827 Investment properties Other assets 24,997 Fixed assets Total assets 643,976 Liabilities Deposits 13,962 Other liabilities 80,269 Capital & reserves Total Liabilities 94,231 Net liquidity surplus as at 31 Dec 549,745 Cumulative liquidity surplus 549,745 12, , , , , ,682 1,020,237 1,153,337 1,153,337 25,438 45, , , , , ,204 25,438 1,198,860 1,282,509 4,148,987 1,438,624 1,752,446 3,205,032 80, , , , ,438,624 2,605,429 4,138, ,204 25,438 (239,764) (1,322,919) 10,703 1,547,949 1,573,387 1,333,623 10, LIQUIDITY RISK MATURITIES OF RISK ASSETS AND DEPOSIT LIABILITIES 0-30 days 1-3 months 3-6 months 6-12 months Over 1 year Total MATURITIES OF ASSETS AND LIABILITIES Assets Investment properties Loans and advances 26,827 Other assets 24,997 Total risk assets 51,825 Liabilities Deposits 13,962 Net liquidity gap at 31 December 37,863 1,153,337 1,153, , ,682 1,020,237 25,438 45, , , ,728 25,438 1,198, ,682 2,433,532 1,438,624 1,752,446 3,205, ,728 25,438 (239,764) (777,765) (771,500) The table above analyse assets and liabilities of the Bank into relevant maturity grouping based on the remaining period at balance sheet date to the contractual maturity date. The matching and controlled mismatching of the maturities and interest rates of assets and liabilities is fundamental to the management of banks. It is unusual for banks assets and liabilities to be complelety matched since business transacted is often of uncertain terms and of different types. An unmatched position potentially enhances profitability, but can also increase the risk of losses. 24

26 STATEMENT OF VALUE ADDED FOR THE YEAR ENDED 31 DECEMBER December 31, - Gross earnings - Interest expense 250,061 (112,373) 137,688 Administrative and other expenses - Local Provision for doubtful debts (194,827) (10,702) VALUE CONSUMED (67,842) 100 DISTRIBUTED AS FOLLOWS: In payment to employees: - Salaries, wages and other allowances 31,750 (49) Retained for future replacement of assets and expansion of business: - Depreciation - Loss retained in the business 130,426 (201) (227,018) 350 (64,842) 100 Value added represents the additional wealth which the Bank has been able to create by its own and its employees' efforts. This statement shows the allocation of that wealth among employees, shareholders, government and that retained for future creation of more wealth. 25