SYPO UGANDA LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

Transcription

1 ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

2 SYPO (U) LIMITED CONTENTS OF THE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013 CONTENTS PAGE Company Information 1 Report of Directors 2 Statement of Directors Responsibilities 3 Independent Auditors Report 4-5 Financial Statements Statement of Comprehensive Income 6 Statement of Financial Position 7 Statement of Changes in Equity 8 Statement of Cash Flows 9 Notes to the Financial Statements 10-16

3 COMPANY INFORMATION FOR THE YEAR ENDED 31 DECEMBER 2013 Principal Place of Business Kisoga, Mukono District, P. O. Box 33629, Kampala Secretary M/s Candia Advocates & Legal consultants Social Security House, 5 th floor Western Wing, Plot 4 Jinja Road, P. O. Box 33629, Kampala Bankers Centenary Rural Development Bank Ltd Plot 22 P. O. Box, 790 Mukono Auditors Grand & Noble Block B, Flat 665C, Buganda Road, Opposite Watoto Church parking/ Kampala Institute P. O. Box 29164, Kampala.-Uganda 1

4 REPORT OF THE DIRECTORS FOR THE YEAR ENDED 31 DECEMBER 2013 The directors submit their report and the audited financial statements for the year ended 31 December2013, which disclose the company s state of affairs. 1. Principal Activities The company is engaged in the business of providing small, low-threshold loans to poor people in rural areas of Central Uganda 2. Results The results for the year are set out on page Dividends The directors do not recommend payment of a dividend in respect of the year ended 31 December Reserves The reserves of the company are set out on page Directors The Directors who managed the business during the year and to the date of this report were as shown below: Mr. Ger. V.D. Bruggen Mr. Paul Rene Mr. Duko Steven Hopman Ms. Emma Kandelaars Chairman of the Board Treasurer of the Board Director Director 6. Auditors Grand & Noble have expressed their willingness to continue in office in accordance with Section 167(2) of the Ugandan Companies Act (Cap 1 of 2012). By Order of the Board

5 STATEMENT OF DIRECTORS RESPONSIBILITIES FOR THE YEAR ENDED 31 DECEMBER 2013 The Uganda Companies Act (Cap 1 of 2012) requires the directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the company as at the year end and of the profit or loss for that year. Directors are also required to ensure that the company keeps proper accounting records that disclose, with reasonable accuracy at any time, the financial position of the company. They are also responsible for safeguarding the assets of the company. The directors accept responsibility for the financial statements, which have been prepared using appropriate accounting principles supported by reasonable and prudent judgements and estimates, in conformity with International Financial Reporting Standards (IFRS) and the Companies Act Cap 1 of The directors are of the opinion that the financial statements give a true and fair view of the state of affairs of the company and of its operating results. The directors further accept responsibility for the maintenance of accounting records that may be relied upon in the preparation of financial statements, as well as designing and implementing adequate systems of internal controls. The directors have made an assessment of the company operations and its ability to continue as a going concern and nothing has come to their attention to indicate that the company will not remain a going concern for at least twelve months from the date of this report. Signed on behalf of the Board of Directors by: Director Date Director Date 3

6 INDEPENDENT AUDITORS REPORT TO THE SHAREHOLDERS OF SYPO UGANDA LIMITED We have audited the accompanying financial statements of Sypo Uganda Limited, set out on page 6 to15, which comprise the statement of financial position as at 31 December2013, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes. Directors' Responsibility for the Financial Statements The Directors are responsible for the preparation and fair presentation of the financial statements in accordance with International Financial Reporting standards and the Uganda Companies Act Cap 110. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatements, 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. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatements. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's 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 auditor considers 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 management, as well as evaluating the overall presentation of 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 accompanying statements give a true and fair view of the financial position of Sypo Uganda Limited as of 31 December 2013and its profits and cash flows for the year then ended, in accordance with International Financial Reporting Standards and the requirements of the Uganda Companies Act, Cap 1 of

7 Report on Other Legal Requirements As required by the Ugandan Companies Act (Cap 1 of 2012) we report to you, based on our audit, that: i. we have obtained all 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 company, so far as appears from our examination of those books; and iii. the company s statement of the financial position and statement of comprehensive income are in agreement with the books of account. Certified Public Accountants Kampala

8 STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER Note Ushs 000 Ushs 000 Revenue 2 142,135 36,756 Administrative Expenses 3 (39,146) (45,861) Staff costs 4 (63,617) (35,231) Operating Profit/ (loss) 39,372 (44,336) Finance charges 5 (39,161) (9,037) Profit / (Loss) before taxation 211 (53,374) Taxation 7.a 5,669 - Net Profit /(Loss) 5,880 (53,374) Other Comprehensive Income for the Year - - Total Comprehensive Income for the Year 5,880 (53,374) 6

9 SYPO UGANDA LIMTED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER Note Ushs 000 Ushs 000 Assets Non-Current Assets Property Plant and Equipment 9 11,051 8,517 Deferred tax Asset 9,635-20,686 8,517 Current Assets Loans and advances , ,695 Prepayment Cash and bank 12 87,218 60, , ,351 Total Assets 921, ,868 Equity and Liabilities Capital and Reserves Issued Capital 8 30,000 30,000 Capital Reserves 2,600 2,600 Accumulated Profit/(Loss) (47,494) (53,374) (14,894) (20,774) Current Liabilities Trade and Other Payables 13 39,405 10,337 Income Tax Payable 3,966 43,371 10,337 Non-Current Liabilities Long term Loans , , , ,304 \ Total liabilities 937, ,641 Total Equity and Liabilities 921, ,869 These financial statements were approved by the Board of Directors on and were signed on its behalf by: -... Director Director 7

10 STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2013 Issued Capital Capital Reserves Retained Earnings Total Equity Ushs 000 Ushs 000 Ushs 000 Ushs 000 As at 1 January ,000 2,600 (53,374) (20,774) Total comprehensive profit for the year - - 5,880 5,880 As at 31 December ,000 2,600 (47,494) (14,894) Issued Capital Capital Reserves Retained Earnings Total Equity As at 1 st July Share capital 30,000 2,600-32,600 Total comprehensive profit for the year - - (53,374) (53,374) As at 31 st December ,000 2,600 (53,374) (20,774) 8

11 STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER Note Ushs 000 Ushs 000 Cash Flows From Operating Activities Profit/Loss for the period 211 (53,374) Adjustments for: Depreciation 4,437 2,338 Operating profit from operating activities 4,648 (51,035) Changes in Working Capital Increase /(Decrease) in trade and other receivables (548,408) (265,575) Decrease or (Increase) in trade and other payables 29,068 10,337 Cash Generated From Operating Activities (519,340) (255,238) Net Cash Flows From Operating activities (514,692) (306,273) Investing Activities Purchase of property, plant & equipment (6,971) (10,856) Net Cash Flows Used in Investing Activities (6,971) (10,856) Financing Activities Cash flows from financing activities Share Capital - 30,000 Capital Reserves - 2,600 Long term Loans 548, ,304 Net Cash Flows From Financing Activities 548, ,904 Net Increase in Cash and Cash Equivalents 26,433 60,775 Cash and Cash Equivalents at 1January ,775 - Cash and Cash Equivalents at 31 December ,218 60,775 9

12 NOTES TO THE FINANCIAL STATEMENTS 1. Significant Accounting Policies The principal accounting policies adopted in the preparation of these financial statements are set out below: i) Basis of Accounting The financial statements are prepared under the historical cost basis of accounting except where otherwise stated in the accounting policies below. The statements comply with International Financial Reporting Standards (IFRS) International Accounting Standards (IAS) and interpretations issued by the International Accounting Standards Board (IASB). ii) Revenue Recognition Revenue is recognized when it is probable that economic benefits will flow to the company and the revenue can be reliably measured. iii) Property and Equipment Property and equipment are initially stated at cost or valuation less accumulated depreciation and impairment. Depreciation is calculated on a monthly basis on straight line method after deducting expected salvage value. An asset purchased during the month will receive full month depreciation regardless of the purchase date. Computer and Accessories 33.0% Office furniture 12.5% Office equipment 12.5% Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount. Gains and losses on disposal of property and equipment are determined by reference to their carrying amount and are taken into account in determining operating profit. iv) Trade Receivables Trade receivables are stated at anticipated realizable value. An estimate is made for bad and doubtful debts based on a review of outstanding receivables at year end. Bad debts are written off through the income statement when all reasonable steps to recover them have been exhausted. v) Foreign Currency Transactions and Balances Assets and liabilities expressed in foreign currencies are translated into Ugandan shillings at the rates ruling at that date. Foreign currency transactions during the year are translated at the rates ruling at the transaction dates. Gains and losses on exchange are dealt with in the income statement. vi) Taxation Current income tax Current income tax assets and liabilities for the current and prior periods are provided based on the amount expected to be recovered from or paid to the tax authority. The tax rates and tax laws used to compute the amount are those in force by the balance sheet date 10

13 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) Significant accounting policies (continued) Deferred income tax Deferred income tax is provided using the liability method on temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.currently enacted tax rates are used to determine deferred tax. Deferred tax assets are recognised only to the extent that it is probable that future taxable profits will be available against which temporary timing differences can be utilised. vii) Components of Cash and Cash Equivalents For the purpose of the cash flow statement, cash is considered to be cash on hand and balances held in banks. viii) Provisions Provisions are recognized when the company has a present obligation (legal or constructive) as a result of the past event and it is probable that an outflow of resources/economic benefits will occur to settle the obligation and the obligation can be reliably estimated. ix) Comparatives Comparative figures have been adjusted to conform to changes in presentation in the current year where necessary. 11

14 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) Ushs 000 Ushs Revenue Breakdown Zone Joan 50,350 21,272 Zone Lydia 40,309 10,513 Zone Milly 33,468 5,223 Zone- Apio 18,362 - Zone- Miriam 7 - Less: Loan loss (362) (355) 142,134 36,653 Interest on savings ,135 36, Administrative Expenses Audit fees 4,332 1,900 Bank charges 3,064 1,909 Rent and Utilities Zone Office 5,620 3,900 Depreciation 4,437 2,339 Legal fees 3, License Airtime 1,385 1,218 Internet 2,594 2,160 MIS maintenance Foreign exchange loss on loans - 25,078 Repair Stationery 1, Office expenses 1,876 2,379 Team events - 1,201 Transport 9,210 1,324 Condolences Other ,146 45, Staff Costs Salaries 35,085 30,612 Staff training 3,550 1,989 Reward and recognition PAYE 4,423 - NSSF 3,829 - Medical insurance 2,605 - Field allowances 5,368 - Bonus 5,400 - Recruitment and background checks 3,357 1,980 63,617 35, Finance charges Interest on loans 24,740 8,745 Foreign exchange loss Unrealised foreign exchange loss on interest 1,048 - Unrealised foreign exchange on principal 13,373-39,161 9, Operating Profit Operating profit is stated after charging /crediting the following: Depreciation 4,437 2,339 Auditors remuneration 4,332 1,900 Staff Costs 63,617 35,231

15 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 7. Taxation a. Income tax charge for the year Current year tax charge 3,966 - Deferred income tax charge(credit) (9,635) - (5,669) - b. Tax recoverable At beginning of the year - - Charge for the year - - Tax paid - - Withholding tax recoverable - - WHT payable to URA - - At the end of the year - - c. Deferred income Tax Deferred income tax is calculated on all temporary differences under the liability method using a principal tax rate of 30% 1 Jan 2013 Income 31 Dec 2013 Statement Ushs 000 Ushs 000 Ushs 000 Deferred income tax liability 2,113 2,114 Accelerated depreciation Unrealised foreign exchange loss - - Deferred interest (11,748) (11,748) Tax losses - - -) Net deferred income tax (asset)/liability - (9,635) (9,635) 8. Share Capital Issued capital Number of Shares Issued Capital (Ushs 000) As at 1 January ,000 30,000 As at 31 December2013 3,000 30, Property and Equipment Computer & Accessories 13 Office Furniture Office Equipment Total Ushs 000 Ushs 000 Ushs 000 Cost As at 1 January ,891 1, ,517 Additions 5,426 1, ,971 Disposals As at 31 December ,317 3,053 1,118 15,488 Depreciation As at 1 January , ,339 Charge for the Year 1, ,097 As at 31 December , ,436 Net Book Value As at 31 December ,328 2, ,052 As at 31 December ,891 1, ,517

16 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 10. Net Loan Portfolio Zone- Joan Zone- Lydia Zone- Milly Zone- Apio Zone- Miriam Total Ushs 000 Ushs 000 Ushs 000 Ushs 000 Ushs 000 Ushs 000 As at 1 January ,106 82,988 95, ,695 Disbursements 475, , , ,500 1,200 1,446,400 Repayments (277,493) (264,068) (257,989) (115,891) (20) (897,460) As at 31 December , , ,385 96,609 1, ,635 Less: Provisions for Bad debts As at 1 January Loan Write offs during the year (362) (362) Total provisions (362) (362) As at 31 December , , ,385 96,609 1, , Ushs 000 Ushs Prepayments Prepaid rent Zone Apio Zone Joan Zone Lydia Zone Milly Zone - Miriam Cash and Bank balance Centenary Bank (a) 85,110 56,174 Cash at hand (b) 2,108 4,602 87,218 60,776 a. Centenary Bank Zone Joan 16,486 13,930 Zone Lydia 9,892 15,939 Zone Milly 22,023 4,779 Zone - Apio 10,043 - Zone - Miriam 3,969 - Savings Account Main Account 22,639 21,447 85,110 56,174 b. Cash at Hand Zone Joan 315 4,141 Zone Lydia Zone Milly Zone Apio Zone Miriam 64-2,108 4,

17 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 13. Trade and Other Payables Audit fees 2,360 1,300 Interest payable 34,826 9,037 Rent payable Salary payable PAYE payable Prepayments received NSSF payable ,405 10, Long term Loans Sypo Netherlands 893, , , ,284 Sypo Uganda Limited acquired Euro denominated term loans from Sypo Netherlands totaling 254,375 which attract interest of 4% per annum. Repayments of monthly installments of principal plus accrued interest will start after each grace period, over a period of not more than one year per loan. 15. Contingent Liabilities The company had no contingent liabilities in respect of the bank and other guarantees and other matters arising in the ordinary courses of the business from which it is anticipated that any material liabilities will arise as at 31 December Events after the Reporting Date There were no events after the reporting date affecting the financial statements of the company. 15