The Modern Look of Banking Excellence

Transcription

1 The Modern Look of Banking Excellence 2016 ANNUAL GENERAL REPORT Amenfiman Rural Bank Limited

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3 Contents Corporate Information Chairman s Report Report of the Directors Statement of Directors Responsibilities Independent Auditors Report Statement of Comprehensive Income Statement of Financial Position Statement of Cash Flows Statement of Changes in Equity 2015 & 2016 Notes to the Financial Statements Capital Allowance and Income Tax Computations Capital Adequacy Liquidity Ratio Schedule Of Appendices Proxy Authorization Amenfiman Rural Bank - AGM

4 Corporate Information Board Of Directors Dr. Toni Aubynn Mr. Moses Ampong Mr. Justice Quaidoo Mr. Morgan Setordjie Mr. Eustace Kwesi Haizel Capt. Fred Quaah Afful (Rtd.) Mad. Agartha Cudjoe Mr. Edmund Afful Chairman Vice - Chairman Director / Secretary Director Co-opted Director Director Director Management Staff: Dr. Alexander Asmah Mr. Jeremiah Baidoo Mr. Mark Aggrey Mr. Evans Aikins Mr. Patrick Darkwa Mr. Ebenezer Ankapong Mr. Anthony Kwaw Adu-Broni Mr. Ken Amoah Mr. Dominic Antwi Chief Executive Officer Chief Internal Auditor Head, Risk & Compliance Head, Finance And Operation Head, Credit Head, ICT Head, HR & Admin. Head, Branch Network Operations Manager Auditors: K and A Accounting Services 49 Boundary Road (Coastal) Off Spintex Road, Baatsona Accra P. O. BOX 8361, Accra North Registered Office: Amenfiman Rural Bank Limited P. O. Box 14, Wasa Akropong, Western Region, Ghana. 4 Amenfiman Rural Bank - AGM 2016

5 Board of Directors MR. MOSES AMPONG Vice Chairman. MR. ANTHONY J. QUAIDOO Director / Secretary. DR. TONI AUBYNN CHAIRMAN Capt. FRED QUAAH AFFUL(Rtd) -Director MR. EUSTACE KWESI HAIZEL Director / Solicitor. MR. MORGAN SETORDJIE Director MAD. AGARTHA CUDJOE Director MR. EDMUND AFFUL Director Amenfiman Rural Bank - AGM

6 Management Team MR. EVANS AIKINS Head: Finance & Operations MR. PATRICK DARKWA Head: Credits DR. ALEXANDER ASMAH CHIEF EXECUTIVE OFFICER MR. EBENEZER ANKAPONG Head: IT MR. JEREMIAH BAIDOO Chief Internal Auditor MR. MARK AGGREY Head: Risk & Compliance MR. DOMINIC ANTWI Operations Manager. MR. ANTHONY KWAW ADU-BRONI Admininstration/HR MR. KENNEDY AMOAH Head: Branch Network 6 Amenfiman Rural Bank - AGM 2016

7 Notice of Annual General Meeting NOTICE IS HEREBY GIVEN THAT the 33rd Annual General Meeting of the Amenfiman Rural Bank Limited will be held on Saturday 24th June, 2017 at 10.00am prompt at the Assembly Hall of the Amenfiman Senior High School, Wasa Akropong. A shareholder of the bank entitled to attend and vote may appoint a proxy to attend and vote in his/ her stead and such proxy need not be a shareholder of the Bank. AGENDA Ordinary Business By Ordinary Resolution 1. To receive the reports of the Chairman of the Board of Directors for the year. 2. To receive and consider the report of the Directors for the year ended 31st December, To receive and consider the Auditor s Report and approve the Financial Statements for the year ended 31st December, To declare a dividend. 5. To authorize the Directors to fix the remuneration of the Auditors. 6. To approve the remuneration of Directors. 7. To elect Directors in place of those retiring. 8. Resolution to transfer unpaid dividend to stated capital Note: A shareholder of the bank entitled to attend and vote may appoint a proxy to attend and vote in his/her stead and such proxy need not be a shareholder of the Bank. The instrument appointing such a proxy must be deposited at the registered office of the Bank, P. O. Box 14, Wasa Akropong not less than forty-eight (48) hours before the appointed time of the meeting. By Order of the Board ANTHONY JUSTICE QUAIDOO (Secretary to Board) Amenfiman Rural Bank - AGM

8 Report of the Chairman of The Board of Directors to the 33rd Annual General Meeting of Shareholders of Amenfiman Rural Bank Limited Distinguished shareholders, Fellow Board Members, Nananom, Ladies and Gentlemen, it is a great honor for me today to welcome all of you to the 33rd Annual General Meeting of Amenfiman Rural Bank Limited, Ghana s leading rural bank. It gives me great pleasure to present to you the Annual Report and Financial Statements of our Bank for the year ended 31st December, Macroeconomic and Political Environment Macroeconomic and political environment have significant influence on the way businesses perform. Ghana s economy experienced slow growth during the year under review at the backdrop of IMF fiscal consolidation program and rising debt. With a GDP growth 3.9% from 3.4% 2015, general economic activities in the country could best be described as modest. The national economy experienced some inflationary and exchange rate as inflation peaked at 19.2% even though we managed to end the year at 15.4%. The 9.6% depreciation of the dollar which is a major trading currency also affected the prices of goods and services in the country. Similarly, the run up to the 2016 general elections created a lot of uncertainties in the business community of which Amenfiman was no exception. In spite of the challenging macroeconomic and political environment that pertained during the year, we managed to pull yet another outstanding result. Business Operating Performance I am happy to inform you that the Bank posted yet another impressive result during the year under review. My fellow Shareholders, the key business performance indicators below point to the fact that your Bank is financially sound and very healthy. Our 2016 operating results reflect our position in the market as the leading Rural Bank in Ghana. In 2016 financial year, the Bank grew its deposit by 47.5% from 87.3 million in 2015 to million. We achieved growth in our investment portfolio by 45.5% from 55.5 million in 2015 to 80.8 million in 2016 and made a profit before tax of 9.98 million in 2016 representing 78%. As always, I pledge the full commitment of the Board and Management in ensuring that we continue to execute our strategy and remain a strong leader in the rural financing agenda in particular and the financial inclusion mission in general. The following are the highlights of our financial performance for the year ended 31st December, 2016 Financial Indicators % Change Profit Before Taxation 9,987, ,582, Profit After Taxation 8,892, ,078, Investments 80,815, ,504, Advances 41,094, ,321, Total Assets 158,798, ,462, Total Deposits 128,853, ,259, Shareholders Funds 23,120, ,847, Amenfiman Rural Bank - AGM 2016

9 Profit Before Taxation 9.9 GhC M Profit After Taxation Investments GhC M GhC M % % 45.5% Advances Total Assets Total Deposit 41.1 GhC M GhC M GhC M % % 47.5% Shareholders Funds 23.1 GhC M % Amenfiman Rural Bank - AGM

10 Report of the Chairman of The Board of Directors to the 33rd Annual General Meeting of Shareholders of Amenfiman Rural Bank Limited Operating Income Distinguished Shareholders, your Bank improved significantly on its income generation activities reflecting the careful execution of strategy during the year under review. Total operating income for the year 2016 was 30,460,607 as against 21,246,744 in The introduction of Research and Development this year will lead to further introduction of market focused, customer-centric products to give us the needed competitive advantage in the market. Operating Expenses Fellow Shareholders, as we may be aware, the cost of doing business in Ghana was high during the year under review as a result of macroeconomic difficulties we experienced as a country and this impacted on our expenditure. In spite of these difficulties, operating expenses were kept under control with a rise of 29% from 15,347,789 in 2015 to 19,869,019 as against 45% in prior year. I believe this is very commendable, and I strongly commend management for this performance. Profitable Growth Distinguished Shareholders, the bank made another significant progress in profitability to consolidate its leadership in the Rural Banking Industry. I am pleased to inform you that your Bank achieved a profit growth of 78% during the year 2016 from 5,582,248 to 9,987, as against prior year profit growth of 20%. This feet is a reflection of a successful implementation of our strategies and we are grateful to all our shareholders and customers for patronizing our products. Ladies and Gentlemen, our growth and expansion strategy is on course and the Board will continue to work with management to push this agenda for the benefit of all members. As a Board, we will continue to work hard to enhance the value of all stakeholders. Deposit As a leader in rural financing and financial inclusion in Ghana, deposit mobilization remains a key area for us. The Bank extended its deposit mobilization to very remote areas in our communities. Distinguished shareholders, the Bank s total deposits grew significantly from 87.3 million in 2015 to million in 2016 representing 47.5%. Notwithstanding this performance, the Bank continues to face stiff competition from both banks and non-bank financial institutions. Our strength however, is the continuous and growing loyalty which enjoy from our cherished customers and I would like to plead with all Shareholders to work as brand ambassadors for your Bank by promoting it positively on any platform that may be available for you. The Board and Management are exploring agency banking as a strategy to reach out to more depositors as a means of expanding financial access and inclusion while increasing our deposit base. Total Assets Distinguished Shareholders, it is exciting to note that the value of our business keeps improving year after year. The total assets of the Bank grew from million in 2015 to million in 2016 representing 50% growth over the year. An aggressive deposit mobilization, supported by growth in Loans and advances and investments, anchored our asset growth. Owners Wealth also saw a significant growth of 46% from 15.8 million in 2015 to 23.1 million in Our reserves have grown respectably, due largely, to the significant growth in profitability. It is my pleasure to appreciate Management and Staff for this impressive performance. 10 Amenfiman Rural Bank - AGM 2016

11 Report of the Chairman of The Board of Directors to the 33rd Annual General Meeting of Shareholders of Amenfiman Rural Bank Limited Rural Financing Agenda Distinguished Shareholders, ladies and gentlemen, our quest to remain leaders in rural financing is truly on course as we continue to increase access to credit to Micro Small and Medium Enterprises (MSME) and farmers within our rural communities. This is helping to boost economic activities and development in our communities. During the year under review, a total of 64 million out of proposed 66 million was given out as loans to Micro, Small and Medium Enterprises in our operational areas. I am happy to announce once again that we have earmarked an amount of 80 million for farmers and MSME in our communities in Ladies and gentlemen, our special Farmers loans scheme is doing very well and so the Board has approved an expansion to cover all the farmers. This will be our modest support for government s programme using agriculture to underpin Ghana s growth and development. I wish to encourage our farmers to reciprocate the kind gesture by abiding with rules governing the special farmers loan scheme. Proposed Dividend Ladies and Gentlemen, our business results for 2016 show positive growth of our enterprise as has been the trend over the years. In view of the continuous growth in profitability and line with our policy to pay appropriate financial returns on your investment, it is with much pleasure that I propose an increase in dividend per share from per share to per share. You will recall that, we increase our dividend per share by similar margin last year. The increase is also in line with our general philosophy of create and share implying that the benefit of our success is shared among all stakeholders. Fellow Shareholders, it is exciting to note that the current dividend of per share is a 30% return on your investment considering a share price of 0.20 per share. You would agree with me, Ladies and Gentlemen, that this rate of return is significantly higher than market rates especially at a time when GOG treasury bills are around 12% per annum. I wish to encourage all current shareholders and prospective investors to consider Amenfiman as your investment destination. We have proven track record of consistent strategy execution, which has led to growth in all sides of the business. We wish to assure you that the Board will continue to make decisions in your best interest. Fellow shareholders, we have observed that due to several reasons, some of the members do not collect their dividends as declared resulting in accumulation of large amount of unpaid dividends in the Dividend Payable Account. The Bank of Ghana and the External auditors have raised concerns and have recommended that the unpaid amount is moved to Stated Capital account. In view of this, the Board is proposing the transfer of all unpaid dividends as at 31st December, 2016 to stated capital account. Again, we propose that future dividends which remain uncollected after two years be converted to shares and transferred to the stated capital account. Retirement of Directors Distinguished Shareholders, in line with section 298(a) of the companies code 1963, Act 179, two of your Directors are due to retire on rotation basis. The two who are the finance brains of the Board have offered themselves for re-election in line with the requirement of the law. They are Capt. Fred Quaah Afful (Rtd) and Mr. Anthony Justice Quaidoo. I wish to recommend these two for re-election. Amenfiman Rural Bank - AGM

12 Report of the Chairman of The Board of Directors to the 33rd Annual General Meeting of Shareholders of Amenfiman Rural Bank Limited Awards and Other Achievements Fellow Shareholders, Amenfiman Bank continues to receive laurels and recognitions both nationally and internationally for its role in rural financial intermediation and financial inclusion in Ghana. During the year under review, your bank received several awards from reputable organizations, both home and abroad. The following are but few of the awards received in Ghana Club 100 Awards Ladies and Gentlemen, Amenfiman Bank was once again awarded by the Ghana Investment Promotion Center in the prestigious Ghana Club100 awards as the Leading Rural Bank in This is the third time in a row that your Bank has received this recognition for the outstanding financial results, exceptional management and leadership and positive contribution to the prosperity of the people. We are highly recognized as a long-standing member of Ghana Club 100. We must all work hard to protect the gains made. Business and Financial Services Excellence Award 2016 In the national award for Business and Financial excellence organized under the auspices of the Ministry of Trade, Amenfiman Bank received two Gold awards: Deposit Mobilization and Overall Best in Rural Banking. Similarly Amenfiman also received two Gold Awards as the Best Rural Bank in the Western Region and the Best in Deposit Mobilization in the Western Regional Business and Financial Services Excellence Award. Brand Excellence Award At the recent Brand Excellence Award held in Accra by Premier Brands, Amenfiman Bank received four merit awards as a confirmation of the immense role the Amenfiman brand has played in the last three years in leading the way towards excellence in branding and as a testimony of the competence of the team behind the Amenfiman Brand. The four awards are Most Profitable Rural Bank Brand in Ghana, Overall Best Rural Bank Brand in Trade Finance, Best Rural Bank Brand in Ghana and Rural Bank Brand of the Year These awards also confirm the Banks superiority in brand building through successful strategy execution. ARB Apex Bank Performance Ranking and Bank of Ghana Composite Ratings Amenfiman Bank continues to enjoy the recognition and rating as a strong bank. This is a reflection of a strong Board, competent Management and hardworking employees. Other Awards/Recognitions The Bank also received the International Star Quality Award as the Most Valuable Rural Banking Brand in Africa, Best Enterprise in the Business of Banking from Germany, and the Most Innovative Rural Bank of the Year Award during the Pan African Eminence Awards in Corporate Social Responsibilities Distinguished Shareholders, in line with the policy to give a portion of our profits back to society, the Bank supported a number of social interventions within its catchment area during the year under review. The Amenfiman scholarship scheme continue to provide financial support to needy but brilliant children to further their education at the secondary school level. Fellow Shareholders, even though our bank has supported so many projects within our communities and continue to do so, it is extremely important that we make a major statement at this time of our growth to demonstrate our commitment to enhancing the socio-economic and sustainable development of the Wasa Amenfi in particular and Ghana in general. Distinguished Shareholders, as a Board, we are convinced about the socio-economic and general developmental impact of a higher educational institution in transforming society. In this regards, the Board has taken a decision that 12 Amenfiman Rural Bank - AGM 2016

13 Report of the Chairman of The Board of Directors to the 33rd Annual General Meeting of Shareholders of Amenfiman Rural Bank Limited Amenfiman Bank will lead the way, with the support of Nananom, of course, to establish a University College for the Amenfi State.. As a first step, the Bank has commissioned a technical assessment of the project, of which the preliminary feedback is positive. The Board has proposed additional 10% of profit after tax annually to fund this project. This makes our total contribution to corporate social responsibility 15% of profit after tax. The vision is big and the commitment is enormous but as always we believe we can count on your support. This project will be our single biggest commitment ever, and by any Rural Bank, in transforming our society for future generations. Ladies and Gentlemen, Gold will not be there forever, cocoa prices and yield will rise and fall, but educated society will be our new gold and cocoa, which will stand the test of time. Human Resource Development Distinguished Shareholders, human resource development remains one of the important pillars of our growth strategy. The board is happy that the investments we are making in our employees are yielding the desired results. Our employees have become one of the most sort after skilled staff in the industry. The first batch of our novel talent program AMERB Talent Academy Program (a-tap) will graduate this year. The program which seeks to provide our employees with solid leadership, managerial and competency based training to prepare our own people to take responsible roles in them for the future is already giving us the right competencies to support our expansion program. We also support some of our staff to pursue professional careers in areas relevant to the execution of our strategy and for the future of the bank. I wish to take this opportunity to congratulate our Chief Executive Officer Dr. Alexander Asmah for completing a doctorate degree in Global Business and Leadership. Dr. Asmah, congrats. Branch Network Expansion Distinguished Shareholders, our branch network expansion and modernization project is on course and works at various places are progressing steadily. Early next month we will commission our ultra-modern office to officially launch our Sefwi Dwenease branch in the Sefwi Wiawso Metropolis. Similarly, we will launch our second branch office in Tarkwa in August this year. We have also identified and working feverishly towards expanding further into some key strategic markets which will further enhance the value of our business. In addition, the construction of the new office for the Bawdie Branch is completed and will be officially inaugurated next month. The construction of the Manso Amenfi branch office is progressing steadily and it s expected to be completed soon. Thankfully, the litigation on the parcel of land earmarked for the construction of the Wasa Akropong High Street branch is over and I am happy to inform you that we have obtained favorable judgment from the court. Automation of Shareholders Register and Poll Voting Distinguished Shareholders, I am pleased to inform you that works on the automation of shareholders register is complete. The automation of the shareholders register will pave way for effective poll voting as required by law and regulation. This will make it possible Amenfiman Rural Bank - AGM

14 Report of the Chairman of The Board of Directors to the 33rd Annual General Meeting of Shareholders of Amenfiman Rural Bank Limited to implement poll voting in future decisions at shareholders meeting. I am entreating all shareholders to visit the nearest branch or the head office to check the status of their shareholdings and also to update their records for effective management of the register. Outlook Distinguished Shareholders, Ladies and Gentlemen, as the government continues the IMFs fiscal consolidation program with assurance to restore fiscal discipline, debt sustainability and promotion of the private sector, we are hopeful that the economy will bounce back towards the third quarter of the year. Again, we hope that the further reduction of the policy and the downwards trend of the government of Ghana Treasury Bill rate will lead to reduction of cost of funds and interest rates to borrowers. Notwithstanding the economic prospects, the moratorium on all small scale mining activities, the raising of the corporate tax rate from 8% to 25% and the generally high cost of business experience during the first two quarters are likely to have some impact on our business. Ladies and gentlemen, as a Bank, we stand ready to partner with various District Assemblies to implement the various government programs, including planting for Food and Jobs, and the One-District, One- Factory project. I will still use this opportunity to repeat my 12year old appeal to government, and directly to the Local Government Ministry to channel portions of the District Assemblies Common Fund and other earmarked funds to some of the Rural banks, especially Amenfiman Bank. We have a proven track record of managing even larger funds. We are also closest to the people. The Assemblies come to us when they are in need! Our focus has not changed much as we work towards driving growth, innovations, and efficiency in our business. Our business model is still tailored for the Micro Small and Medium Enterprises and will push for more market penetration as we develop new and better products and trusted relationships with our clients. We have already began installation of ATMs in our branches and will soon roll out other electronic channels for the benefit of cherished customers The years ahead look brighter and I am very optimistic that we will remain on top of our industry as we carefully execute our agenda. Acknowledgement Nananom, Fellow Shareholders, Ladies and Gentlemen, the numerous extraordinary achievements and successes chalked over the years may create the impression that these were achieved on a silver platter. Far from that, We have achieved this feet by the visionary leadership of our Board and Management, the hard work of staff, and the loyalty of our shareholders and customers. I wish to express my profound gratitude to my fellow Board members for their commitment and unwavering support to steer the affairs of our dear Bank. I salute the management and the entire staff, whose hard work and commitment have seen the bank grow from strength to strength. We are No.1 because you are No.1. Congratulations, once again to all shareholders. I thank you most sincerely for the confidence repose in us. We will continue to work for you. To our cherished customers, I say Ayekoo for your unalloyed loyalty. Finally, and above all, we say Ebenezer, this for how far God has brought us and we are thankful to Him. Amenfiman Bank, your success, our pride 14 Amenfiman Rural Bank - AGM 2016

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16 Report of the Directors The Directors have the pleasure in submitting their Twenty-third annual report together with the Statement of Financial Position as at 31st December 2016; the Statement of Comprehensive Income for the year ended December 2016, Statement of Cash flows as at 31st December 2016 and Statement of Changes in Equity as at 31st December Principal Activities The principal activities carried out by the Bank during the year under review are within the limits permitted by its Regulations and also consistent with its strategic focus. There were no changes in the principal activities of the Bank during the year. Operational Results The results of operations for the year ended 31st December, 2016 are set out in the Statement of Comprehensive Income, Statement of Financial Position, Statement of Cash Flows, Statement of Changes in Equity and the Notes to the financial statements from page 3 to 24. A summary of the results is as follows: Profit After Tax 8,892, ,078, Total Comprehensive Income 33,868, ,226, Total Assets 158,798, ,462, Dividends The Directors recommend the payment of a dividend of GH 0.06 per share for the year ended 31st December, Appointment of Auditors Messrs K and A Accounting services are willing to continue in office as auditors to the Bank for the ensuing year in accordance with the provision of Section 134 (5a) of Ghana Companies Act 1963 (Act 179). The Directors hereby recommend their re-appointment.... Chairman... Director 16 Amenfiman Rural Bank - AGM 2016

17 Statement of Directors Responsibilities The Companies Act of Ghana 1963 (Act 179), the Banking Act, 2004 (Act 673) as amended by the Banking (Amendment) Act 2007 (Act 738), the Banks and Specialized Deposit-Taking Institutions Act, 2016 (Act 930) requires the directors to prepare financial statements for each financial period 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 the profit and loss of the Bank for that period. In preparing those financial statements, the directors are required to: Select suitable accounting policies and apply them consistently; Make judgments and estimates that are reasonable and prudent; State whether applicable accounting standards have been followed; and Prepare the financial statements on a going concern basis, unless it is inappropriate to presume that the Bank will continue in business. The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy the financial position of the Bank and which enable them to ensure that the financial statements comply with the Companies Act 1963 (Act 179), the Banking Act, 2004 (Act 673) as amended by the Banking (Amendment) Act 2007 (Act 738), the Banks and Specialized Deposit-Taking Institutions Act, 2016 (Act 930) and the International Financial Reporting Standards (IFRS). They are also responsible for taking such steps as are reasonably open to them to safeguard the assets of the Bank and prevent and detect fraud and other irregularities. The above statement which should be read in conjunction with the statement of the auditors responsibilities set out on page 1 is with the view of distinguishing for the shareholders the respective responsibilities of the Directors and the Auditors in relation to the financial statements Amenfiman Rural Bank - AGM

18 Auditors Report to the Members of Amenfiman Rural Bank Limited Opinion We have audited the financial statements of Amenfiman Rural Bank Limited, which comprise the Statement of Financial Position as at 31st December 2016, the Statement of Comprehensive Income, Statement of Cash flows, Statement of Changes in Equity and notes to the financial statements, including a summary of significant accounting policies and other explanatory notes for the year then ended as set out on pages 3 to 24. In our opinion, the financial statements present fairly, in all material respects, the financial position of Amenfiman Rural Bank Limited as of 31st December 2016, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards and in a manner required by the Companies Act of Ghana, 1963 (Act 179), Section 78 of the Banking Act, 2004 (Act 673), Banking (Amendment) Act 2007 (Act 738) of Ghana and the Banks and Specialized Deposit-Taking Institutions Act, 2016 (Act 930). Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Bank in accordance with the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Responsibilities of the Board of Directors for the Financial Statements The Board of Directors is responsible for the preparation of the financial statements in accordance with the Companies Act 1963 (Act 179), the Banking Act, 2004 (Act 673) as amended by the Banking (Amendment) Act 2007 (Act 738), the Banks and Specialized Deposit-Taking Institutions Act, 2016 (Act 930) and the International Financial Reporting Standards (IFRS), and for such internal control as the Board of Directors determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Board of Directors is responsible for assessing the Bank 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 Board of Directors either intends to liquidate the Bank or to cease operations, or has no realistic alternative but to do so. The Board of Directors is responsible for overseeing the Bank s financial reporting process. Auditor s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism 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 18 Amenfiman Rural Bank - AGM 2016

19 Auditors Report to the Members of Amenfiman Rural Bank Limited 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 controls 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 Bank s internal controls. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Directors. Conclude on the appropriateness of the Board of 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 Bank s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor s report. 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. We communicate with the Board of Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal controls that we identify during our audit. Report on Other Legal and Regulatory Requirements The Ghana Companies Act 1963 (Act 179) requires that in carrying out our audit work we consider and report on the following matters. We confirm that: i. We have obtained all the information and 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 accounts have been kept by Amenfiman Rural Bank Limited, so far as appears from our examination of those books, and iii. The Statement of Financial Position, and Statement of Comprehensive Income of the Bank are in agreement with the books of accounts. The engagement partner on the audit resulting in this independent auditor s report is Samuel Wilson Ampah (ICAG/P/1074).... Samuel Wilson Ampah (ICAG/P/1074) For and on behalf of: K and A Accounting services (ICAG/F/2017/089) Chartered Accountants, 49 Boundary Road (Coastal) Off Spintex Road, Baatsonaa- Accra Amenfiman Rural Bank - AGM

20 Statement of Comprehensive Income for the year ended 31st December 2016 NOTE Interest Income 3 30,007, ,710, Interest Expense 4 (3,407,680.25) (1,980,073.21) Net Interest Income 26,600, ,730, Commissions and Fees 5 3,213, ,044, Other Operating Income 6 647, , Total Operating Income 30,460, ,246, Impairment Allowance 7 (604,218.21) (316,707.11) Other Operating Expenses 8 (19,869,019.14) (15,347,789.42) Profit Before Tax 9,987, ,582, Taxation 17 (1,094,623.84) (503,316.63) Net Profit After Tax 8,892, ,078, Transfer to Proposed Dividend - - Transfer to Statutory Reserve (1,111,593.30) (634,866.44) Transfer to Income Surplus (4,158,313.67) (2,945,780.26) Transfer to Community Development Fund (1,067,129.57) (152,367.95) Scholarship Fund (177,854.93) (101,578.63) Pension Fund (177,854.93) (50,789.32) Building Fund (2,000,000.00) (1,193,548.90) 40th Anniversary Fund (200,000.00) 0.00 Notes 1-27 form an intergral part of these financial statements Independent Auditors Report - Page Amenfiman Rural Bank - AGM 2016

21 Statement of Financial Position as at 31St December 2016 ASSETS NOTE Cash and Short Term Funds 9 23,927, ,650, Investments 10(a) 80,815, ,504, Loans and Advances to Customers 11 41,094, ,321, Other Assets Account 12 7,314, ,429, ,151, ,905, Other Investments , , Property, Plant & Equipment 14 5,402, ,312, TOTAL ASSETS 158,798, ,462, LIABILITIES AND SHAREHOLDERS' FUND LIABILITIES Deposits and Current Accounts ,853, ,259, Creditors and Accruals 16 6,319, ,340, Current Tax 17(a) 455, (3,960.75) Deferred Tax 17(b) 48, , TOTAL LIABILITIES 135,677, ,614, SHAREHOLDERS' FUNDS Stated Capital 18 1,754, ,542, Statutory Reserve 19 3,400, ,289, Other Funds 20 4,311, ,068, Income Surplus 21 13,654, ,947, TOTAL SHAREHOLDERS' FUNDS 23,120, ,847, TOTAL LIABILITIES AND SHARE- HOLDERS' FUNDS 158,798, ,462, Approved by the Directors on and signed by; CHAIRMAN DIRECTOR Notes 1-27 form an intergral part of these financial statements Independent Auditors Report - Page 1-2 Amenfiman Rural Bank - AGM

22 Statement of Cashflow for the year ended 31st December CASHFLOW FROM OPERATING ACTIVITIES Net Profit Before Tax 9,987, ,582, ADJUSTMENTS TO RECONCILE OPERATING PROFIT TO NET CASH PROVIDED BY OPERATING ACTIVITIES Depreciation and Amortisation 902, , Charge for Loan Impairment 604, , Deferred Income 355, , Other non cash movement (324,357.07) (431,485.68) CHANGES IN OPERATING ASSETS AND LIABILITIES 11,524, ,478, (Increase)/ Decrease in Loans and Advances to (9,404,232.19) (6,567,787.22) Customers (Increase)/ Decrease in Other Assets (5,884,351.13) 3,086, Increase/ (Decrease) in Deposits Liability 41,593, ,117, Increase/ (Decrease) in Creditors and Accruals 3,978, (1,719,624.83) 41,809, ,396, Corporate Tax Paid (608,454.00) (435,206.00) NET CASH INFLOW FROM OPERATING ACTIVITIES 41,200, ,960, INVESTING ACTIVITIES Change in Investments (25,311,187.08) (23,786,330.79) Purchase of Property, Plant and Equipment (2,992,792.70) (2,350,357.98) NET CASH (OUTFLOW) FROM INVESTING ACTIVITIES (28,303,979.78) (26,136,688.77) FINANCING ACTIVITIES Capital Reserve (450,779.98) 1,474, Other funds (1,380,695.73) (967,779.49) Proceeds from Issue of Shares 211, , Other Loans 0.00 (166,666.65) NET CASH (OUTFLOW) FROM FINANCING ACTIVITIES (1,619,747.84) 739, Net Increase / (Decrease) in Cash and Cash Equivalents 11,277, ,563, Cash and Cash Equivalents as at 1/1/ ,650, ,086, Cash and Cash Equivalents as at 31/12/ ,927, ,650, Amenfiman Rural Bank - AGM 2016

23 Statement of Changes in Equity for the year ended 31st December 2016 STATED CAPITAL OTHER FUNDS STATUTORY RESERVES INCOME SURPLUS TOTAL Balance as at January 1 1,542, ,068, ,289, ,947, ,847, Adjustment for the Year - (1,380,695.73) - (450,779.98) (1,831,475.71) Restated Balance 1,542, , ,289, ,496, ,016, Net Profit for the Year ,892, ,892, Proceeds from Issue of Shares Transfer to Statutory Reserve Transfer to Other Funds - Balance as at December , , ,111, (1,111,593.30) - 3,622, (3,622,839.42) - 1,754, ,311, ,400, ,654, ,120, Statement of Changes in Equity for the year ended 31st December 2015 STATED CAPITAL OTHER FUNDS STATUTORY RESERVES INCOME SURPLUS TOTAL Balance as at January 1 1,142, ,538, ,654, ,527, ,863, Adjustment for the Year - (967,779.49) - 1,474, , Restated Balance 1,142, , ,654, ,001, ,369, Net Profit for the Year ,078, ,078, Proceeds from Issue of Shares Transfer to Statutory Reserve 399, , , (634,866.44) - Transfer to Other Funds - 1,498, (1,498,284.79) - Balance as at December 31 1,542, ,068, ,289, ,947, ,847, Amenfiman Rural Bank - AGM

24 Notes to the Financial Statements for the year ended 31st december CORPORATE INFORMATION 1.1 Registration and Nature of Business The bank was incorporated on May 13, 1980 with registration (No. 16,269) and issued with certificate to commence business and license under the Banking Law 1989, PNDCL 225, now replaced by the Banking Act 2004 (Act 673) as amended by the Banking (Amendment) Act 2007 (Act 738), the Banks and Specialized Deposit-Taking Institutions Act, 2016 (Act 930), on September 26, 1980 with registration (No. 027) and January 10, 1984 respectively. The bank commenced business on September 26, The nature of the business the bank is authorized to carry on includes the provision of current and deposit as well as savings and time deposit accounts for its customers. It also acts as agent of the other financial institutions in the country, accepts and discounts bills of exchange and provides finance for small scale farmers, merchants, industrialists, etc. 1.2 Compliance with International Financial Reporting Standards (IFRSs) The bank s financial statements have been prepared in accordance with IFRSs in force as of the reporting date. International Financial Reporting Standards (IFRSs) comprise IFRS 1 to 15 and International Accounting Standards (IAS) 1 to SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies applied by Amenfiman Rural Bank Limited in the preparation of the financial statements are set out below: 2.1 Basis of Accounting The financial statements have been prepared under the historical cost convention as modified by the adoption of fair value measurement basis for assets and liabilities in compliance with IFRS requirements. 2.2 Functional and Presentation Currency The financial statements are presented in Ghana Cedi () which is the functional and presentation currency of the Bank. 2.3 Revenue Recognition Revenue is recognized to the extent that the economic benefit will flow to the bank and can be reliably measured. The following specific income recognition criteria have been applied in the financial statements. i. Interest Income and expenses are recognized on interest bearing assets and liabilities on accrual basis. ii. Commissions and fees income and expenses that are integral to the effective interest rate on a financial asset or liability are included in the measurement of the effective interest rate. Other fees and commission income, including account servicing fees, investment management fees and placement fees, are recognized as the related services are performed. When a loan commitment is not expected to result in the draw-down of the loan, loan commitment fees are recognized on a straight line basis over the commitment period. Other fees and commission expense relates mainly to transaction and service fees, which are expensed as the services are received. 24 Amenfiman Rural Bank - AGM 2016

25 Notes to the Financial Statements for the year ended 31st december Income Tax Income Tax in the Profit and Loss Account comprises current tax and deferred tax. Current tax is the tax expected to be payable, under the Internal Revenue Act 2000 (Act 592), on the taxable profit for the year. Deferred income tax is provided on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts. Deferred tax liabilities are generally recognized for all taxable temporary differences while deferred tax assets are recognized to the extent that it is probable future taxable profit will be available against which deductible temporary differences can be utilized. Deferred tax is calculated using the rate expected to be applicable in the period during which the asset will be realized or the liabilities settled. Deferred tax assets and liabilities are offset when they arise in the same tax reporting entities and relate to income taxes of the same taxation authority, and when a legal right to set off exists. The carrying amount of deferred tax assets is reviewed at each balance sheet date and adjusted to the extent that it is no longer probable that sufficient taxable profit will be available for full or partial utilization of the deferred tax asset. 2.5 Financial Instruments (a) Initial Recognition and Measurement Financial instruments are recognized initially when the bank becomes a party to the contractual provisions of the instruments. The bank classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the substance of the instrument. These are initially measured at fair value (including transaction costs for assets and liabilities not measured at fair value through profit or loss). (b) Subsequent Measurement For purposes of subsequent measurement financial assets and financial liabilities are classified as: i. financial assets measured at fair value through profit or loss ii. financial liabilities at fair value through profit or loss iii. financial assets measured at amortised cost iv. financial liabilities measured at amortised cost v. financial assets measured at fair value through other comprehensive income. A financial asset is measured at amortised cost if both the following conditions are met: (a) The asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows (b) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. A financial asset or financial liability at fair value through profit or loss is one that either: (a) is designated as such upon initial recognition, or (b) meets the recognition of held for trading Amenfiman Rural Bank - AGM

26 26 Amenfiman Rural Bank - AGM 2016

27 Notes to the Financial Statements for the year ended 31st december 2016 A financial asset or financial liability is deemed to be held for trading if (i) t is acquired or incurred principally for the purpose of selling or repurchasing it in the near term, (ii) on initial recognition it is part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit-taking; or (iii) it is a derivative (except for a derivative that is a financial guarantee contract or a designated and effective hedging contract). Financial assets and financial liabilities at amortised cost are measured, subsequent to initial recognition, at amortised cost using the effective interest method. The effective interest method is a method of calculating the amortised cost of a financial asset or a financial liability and of allocating the interest income or interest expense over the relevant period. Theeffective interest rate is the rate that exactly discounts estimated cash payments or receipts through the expected life of the financial instrument or, when appropriate, a shorter period to the net carrying amount of the financial asset or financial liability. Financial assets and liabilities at fair value through profit or loss are measured, subsequent to initial recognition, at fair value with gains or losses recognised in profit or loss. Financial assets and liabilities at fair value through other comprehensive income are measured, subsequent to initial recognition, at fair value with gains or losses recognised in other comprehensive income. The foregoing classification of financial instruments for purposes of subsequent measurement, are spelt out in IFRS 9 Financial Instruments which became effective for annual periods beginning on or after 1st January The adoption of this classification in accordance with IFRS 9 Financial Instruments Disclosures amounts to be early adoption of IFRS 9. The bank s principal financial assets are investments and loans and advances to customers, cash and cash equivalents, while its principal financial liabilities are customer deposits. (c) Derecognition of financial assets and liabilities A financial asset or a portion thereof, is derecognized when the Bank s rights to cash flows has expired or when the Bank has transferred its rights to cash flows relating to the financial assets, including the transfer of substantially all the risk and rewards associated with the financial assets or when control over the financial assets has passed. A financial liability is derecognized when the obligation is discharged, cancelled or has expired. 2.6 The Amortised Cost of a Financial Asset or Financial Liability The amortised cost of a financial asset or financial liability is the amount at which the financial asset or financial liability is measured at initial recognition minus principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount, and minus any reduction (directly or through the use of an allowance account) for impairment or uncollectibility. Amenfiman Rural Bank - AGM

28 Notes to the Financial Statements for the year ended 31st december Fair Value Measurement The bank defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurement assumes an orderly transaction between market participants at the measurement date under current market conditions. In measuring fair value: The bank takes into account the characteristics of the asset or liability being measured that a market participant would take into account when pricing the asset or liability at the measurement date. The bank determines classes of asset or liability for disclosure purposes on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy within which the fair value measurement is categorised. 2.8 Impairment of financial assets At each balance sheet date the Bank assesses whether, as a result of one or more events occurring after initial recognition, there is objective evidence that a financial asset or group of financial assets has become impaired. Evidence of impairment may include indications that the borrower or a group of borrowers is experiencing significant financial difficulty, default or delinquency in interest or principal payments, or the fact that the debt is being restructured to reduce the burden on the borrower. In the case of equity investments, objective evidence would include significant or prolonged decline in the fair value of the investment below its cost. For debt instruments and financial assets measured at amortised cost, if there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between the asset s carrying amount and the present value of the estimated future cash flows (excluding future expected credit losses that have not yet been incurred). The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in the income statement. If, in a subsequent year, the amount of the estimated impairment allowance increases or decreases because of an event occurring after the impairment was recognised, the previously recognised impairment loss is increased or reduced by adjusting the allowance account. Assets together with the associated allowances are written off when there is no realistic prospect of future recovery and all collateral have been utilised. If a future write-off is later recovered the recovery is credited to credit loss expense. The present value of the estimated future cashflows is determined using the financial asset s original effective interest rate. 2.9 Impairment of Non-Financial Assets (Including Property Plant & Equipment (PPE) The Bank assesses at least at each financial year end whether there is any evidence that non-financial assets (including PPE) may be impaired. Where indicators of impairment exist, an impairment test 28 Amenfiman Rural Bank - AGM 2016

29 Notes to the Financial Statements for the year ended 31st december 2016 is performed. This requires an estimation of the value in use of the asset or the cash-generating units to which the asset belong. Estimating the value in use amount requires management to make an estimate of the expected future cash flows from the asset or the cash generating unit and also to select a suitable discount rate in order to calculate the present value of those cash flows Property, plant and equipment The Bank recognizes an item of property, plant and equipment as an asset when it is probable that future economic benefits will flow to it and the amount meets the materiality threshold set by the Bank. Property, plant and equipment are stated at cost less accumulated depreciation and any impairment in value. Depreciation is provided on the depreciable amount of each component on a straight-line basis over the anticipated useful life of the asset. The depreciable amount related to each asset is determined as the difference between the cost and the residual value of the asset. The residual value is the estimated amount, net of disposal costs, which the Bank would currently obtain from the disposal of an asset in similar age and condition as expected at the end of the useful life of the asset. The current annual depreciation rates for each class of property, plant and equipment are as follows: Land and Building 5% Office Furniture & Equipment 20% Motor Vehicle 33% Computer 20% Generator Set 25% Motor Cycles 20% Safe 15% Lawn Mower 25% Costs associated with routine servicing and maintenance of assets are expensed as incurred. Subsequent expenditure is only capitalized if it is probable that future economic benefits associated with the item will flow to the Bank. The carrying values of property, plant and equipment are reviewed for indications of impairment when events or changes in circumstances indicate the carrying value may not be recoverable. If any such indication exists and where the carrying values exceed the estimated recoverable amount, the assets or cash-generating units are written down to their recoverable amount. The recoverable amount of property, plant and equipment is the greater of net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in the income statement in the year the item is derecognized Foreign Currency Transactions denominated in foreign currency are translated into cedis at the rates of exchange ruling on the dates of the transactions. Assets and liabilities denominated in foreign currencies are translated into cedis at exchange rates ruling at the balance sheet date. Any gains or losses resulting from foreign currency translation or exchange are dealt Amenfiman Rural Bank - AGM

30 Notes to the Financial Statements for the year ended 31st december 2016 with through the profit and loss account for the year Cash & Cash Equivalents For the purposes of the statement of cashflows, cash and cash equivalents include cash on hand, balance with ARB Apex Bank, amounts due from other banks and financial institutions and short term government securities Provisions The bank recognizes provisions when it has a present obligation (legal or constructive) as a result of past events and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the bank expects some or all of a provision to be reimbursed, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the income statement net of any reimbursement. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as a borrowing cost Events After the Reporting Period Events subsequent to the reporting date are reflected only to the extent that they relate directly to the financial statements and the effect is material Use of Estimates and Judgements In the preparation of the financial statements, the bank makes estimates and judgements that could affect the reported amounts of assets and liabilities within the next financial year. Key areas in which judgment is applied include: i. Determination of depreciation rates for property, plant and equipment ii. Estimation of Provisions iii. Determination of contingent liabilities and contingent assets iv. Impairment of financial and non-financial assets Employee Benefits Short-Term Benefits Short-term employee benefits are amounts payable to employees that fall due wholly within twelve months after the end of the period in which the employee renders the related service. The cost of short-term employee benefits are recognized as an expense in the period when the economic benefit is given, as an employment cost. Unpaid short-term employee benefits as at the end of the accounting period are recognized as an accrued expense and any short-term benefit paid in advance are recognized as prepayment to the extent that it will lead to a future cash refund a reduction in future cash payment. Wages and salaries payable to employees are recognized as an expense in the income statement at gross amount. The Bank s contribution to social security fund is also charged as an expense. Social Security and National Insurance Trust (SSNIT) Under a National Deferred Benefit Pension Scheme, the Bank contributes 13% of employees basic salary to SSNIT for employee pensions. 30 Amenfiman Rural Bank - AGM 2016

31 Notes to the Financial Statements for the year ended 31st december 2016 The Bank s obligation is limited to the relevant contributions, which are settled on due dates. The pension liabilities and obligations, however, rest with SSNIT. Provident Fund The Bank has a Provident Fund Scheme for all permanent employees. Employees contribute 5% of their basic salary to the Fund whilst the Bank contributes 7.5%. The Bank s obligation under the plan is limited to the relevant contribution which is invested at interest rates agreed by the trustees of the scheme and the Bank New Standards and Interpretations Standards and Interpretations not yet effective The following standard which is relevant to the bank s operations has been published IFRS 9 Financial Instruments This new standard is the first phase of a three phase project to replace IAS 39 Financial Instruments: Recognition and Measurement. Phase one deal with the classification and measurement of financial assets. The following are changes from the classification and measurement rules of IAS 39: Financial assets will be categorised as those subsequently measured at fair value or at amortised cost. Financial assets at amortised cost are those financial assets where the business model for managing the assets is to hold the assets to collect contractual cash flows (where the contractual cash flows represent payments of principal and interest only). All other financial assets are to be subsequently measured at fair value. Under certain circumstances, financial assets may be designated as at fair value. For hybrid contracts, where the host contract is within the scope of IFRS 9, then the whole instrument is classified in accordance with IFRS 9, without separation of the embedded derivative. In other circumstances, the provisions of IAS 39 still apply. Voluntary reclassification of financial assets is prohibited. Financial assets shall be reclassified if the entity changes its business model for the management of financial assets. In such circumstances, reclassification takes place prospectively from the beginning of the first reporting period after the date of change of the business model. Investments in equity instruments may be measured at fair value though. When such an election is made, it may not subsequently be revoked, and gains or losses accumulated in equity are not recycled to profit or loss on derecognition of the investment. The election may be made per individual investment. IFRS 9 does not allow for investments in equity instruments to be measured at cost under any circumstances. The standard was to be effective for annual periods beginning on or after 1st January However, with the completion of the project to replace IAS 39 and the issue on 24th July 2014 of IFRS 9 (2014) as a complete standard the new effective date for IFRS 9 has been changed to reporting periods beginning on or after 1st January, 2018 with early adoption permitted (subject to local endorsement requirements). This notwithstanding early adoption of the previous versions is permitted for limited periods to 1st February Amenfiman Rural Bank - AGM

32 Notes to the Financial Statements for the year ended 31st December INTEREST INCOME Advances 16,076, ,141, Investment 13,931, ,568, TOTAL (PAGE 3) 30,007, ,710, INTEREST EXPENSE Interest on Deposit 3,407, ,976, Interest on Borrowing , TOTAL (PAGE 3) 3,407, ,980, COMMISSONS AND FEES Commitment Fees 1,039, , Commission Received 2,173, ,387, TOTAL (PAGE 3) 3,213, ,044, OTHER OPERATING INCOME Other Income 647, , TOTAL (PAGE 3) 647, , IMPAIRMENT ALLOWANCE Current Provision 1,296, , Previous Provision 692, , Bad Debts Written Off 0.00 (475,432.68) 692, , Charge for the Year (PAGE 3) 604, , OTHER OPERATING EXPENSES Staff Cost (Appendix I) 11,374, ,440, Occupancy Costs (Appendix II) 1,652, ,131, Administrative Expenses (Appendix III) 5,849, ,017, Directors' Remuneration 49, , Audit Fees 18, , Consultancy Fees , Depreciation and Amortisation 902, , Micro Finance Expenses 21, , TOTAL (PAGE 3) 19,869, ,347, Amenfiman Rural Bank - AGM 2016

33 Notes to the Financial Statements for the year ended 31st December CASH AND SHORT TERM FUNDS Cash on Hand 9,866, ,516, ARB Apex Bank 13,659, ,338, Balances with Other Banks 401, , TOTAL (PAGE 4) 23,927, ,650, (a) INVESTMENTS IN SHORT TERM SECURITIES Treasury Bills 8,231, ,487, ACOD ,000, Other Investments 79,335, ,933, Unearned Income on Investment (6,752,066.72) (3,915,903.24) TOTAL (PAGE 4) 80,815, ,504, The Accounting Policies for Financial Instruments have been applied to the following line items. 10 (b) FINANCIAL ASSETS BY CATEGORY AT AMORTISED COST FAIR VALUE TPL TOTAL Description 2016 Cash and Short Term Funds - 23,927, ,927, Investments 80,815, ,815, Loans and Advances to 41,094, ,094, Customers 121,909, ,927, ,837, Cash and Short Term Funds - 12,650, ,650, Investments 55,504, ,504, Loans and Advances to 32,321, ,321, Customers 87,825, ,650, ,476, (c) FINANCIAL LIABILITIES BY CATEGORY Deposits and Current ,853, ,853, Accounts - Deposits and Current ,259, ,259, Accounts - Amenfiman Rural Bank - AGM

34 Notes to the Financial Statements for the year ended 31st December LOANS AND ADVANCES TO CUSTOMERS Analysis by type of Customer: Individuals 27,211, ,141, Other private & public enterprises 12,573, ,523, Staff 2,961, ,676, ,746, ,342, Deferred Fee Income (355,582.22) (328,317.82) Impairment Allowance (1,296,381.72) (692,163.51) TOTAL (PAGE 4) 41,094, ,321, Analysis by Sector: Agriculture, Forestry & Fishing 1,358, , Trading 20,701, ,608, Transport, Storage & Communication 585, , Miscellaneous 20,101, ,783, ,746, ,342, Deferred Fee Income (355,582.22) (328,317.82) Impairment Allowance (1,296,381.72) (692,163.51) TOTAL (PAGE 4) 41,094, ,321, Analysis by type of Advance: Loans 38,119, ,872, Overdraft 4,626, ,469, ,746, ,342, Deferred Fee Income (355,582.22) (328,317.82) Impairment Allowance (1,296,381.72) (692,163.51) TOTAL (PAGE 4) 41,094, ,321, OTHER ASSET ACCOUNTS Stationery Stocks 93, , Prepaid Rent 906, , Prepaid Insurance 14, , Interbranch Account 5,252, , Office Account 1,043, , E-Zwich Debit 3, TOTAL (PAGE 4) 7,314, ,429, OTHER INVESTMENTS Werba Investment 115, , ARB Apex Bank Shares 128, , TOTAL (PAGE 4) 244, , Amenfiman Rural Bank - AGM 2016

35 14 PROPERTY, PLANT AND EQUIPMENT COST / VALUATION Land & Building Motor Vehicle Furniture & Equipment Computers Safe & Lawn Mower Generator TOTAL Gross value as at January 1, ,928, ,357, , , , , ,475, Additions 1,102, , , , , , ,992, Gross value as at 3,030, ,116, ,583, , , , December 31, ,468, ACCUMULATED DEPRECIATION Balance as at 01/01/ , , , , , , ,163, Charge for the Year 85, , , , , , , Balance as at 190, ,245, , , , , ,065, /12/2016 NET BOOK VALUE Balance as at 31/12/2016 Balance as at 31/12/2015 2,840, , , , , , ,402, ,823, , , , , , ,312, Amenfiman Rural Bank - AGM

36 Notes to the Financial Statements for the year ended 31st December DEPOSITS AND CURRENT ACCOUNTS Savings Accounts 84,095, ,571, Current Accounts 25,822, ,483, Time Deposits 18,936, ,204, TOTAL (PAGE 4) 128,853, ,259, CREDITORS AND ACCRUALS Sundry Creditors 3,957, , Audit Fee 15, , Consultancy Fee 2, Office Accounts 1,595, ,173, Dividend Payable 752, , TOTAL (PAGE 4) 6,319, ,340, (a) TAXATION - CURRENT Year Opening Balance Tax Charged Tax Paid Tax Adjustment Closing Balance From 2011 to 2015 (3,960.75) 0.00 (5,474.43) 9, ,064, (608,454.00) , (3,960.75) 1,064, (613,928.43) 9, , Tax Adjustment represents adjustment made to agree GRA final tax assessment of the Bank. 36 Amenfiman Rural Bank - AGM 2016

37 Notes to the Financial Statements for the year ended 31st December 2016 (b) DEFERRED TAX Opening Balance Prior Year Adjustment Tax Charge for the year Closing Balance , , , , , Add/ Deduct: (c) RECONCILIATION OF TAX EXPENSE TO PRODUCT OF ACCOUNTING PROFIT AND APPLICABLE RATE Profit Before Taxation 9,987, ,582, Tax at Applicable 10% 998, , Tax Effect of Non-Deductible Expenses 181, , Tax Effect of Capital Allowances (116,152.37) (61,099.79) Add Origination of Temporary Differences 30, , TOTAL TAX EXPENSE 1,094, , Effective Tax Rate 10.96% 9.02% 18 STATED CAPITAL The Bank is registered with an authorised capital of 20,000,000 ordinary shares of no par value. During the year under review the bank issued 1,058,639 ordinary shares for cash consideration of Gh 211, AUTHORISED Number of Shares of No Par Value ORDINARY 20,000, ISSUED AND FULLY PAID ORDINARY ORDINARY Number Number For Cash 8,701,896 1,542, ,703,559 1,142, Issued for the Year 1,058, , ,998, , Preference Shares 125, , TOTAL (PAGE 4) 9,885,535 1,754, ,826,896 1,542, There is no share in treasury and no call or instalments unpaid on any share. Amenfiman Rural Bank - AGM

38 Notes to the Financial Statements for the year ended 31st December STATUTORY RESERVE This represents the cumulative amounts set aside as non-distributable reserve from annual net profit after tax in accordance with section 29, of the Banking Act 2004,(Act 673) as amended by the banking (Amendment) Act, 2007 (Act 738). 20 OTHER FUNDS This is made up of appropriations to community development fund, scholarship fund, pension fund, building fund and 40th Anniversary fund. 21. INCOME SURPLUS This represents the residual of cumulative annual profits that is available for distribution to shareholders 22 CONTINGENCIES AND CAPITAL EXPENDITURE COMMITMENTS There were neither contingent liabilities nor contingent assets as at the balance sheet date. 23 CAPITAL EXPENDITURE COMMITMENTS There were no capital commitments as at the balance sheet date. 24 PROPOSED DIVIDEND The Board of Directors of the Bank have passed a resolution to propose dividend of 0.06 per share which amounted to 585, in respect of the profit after tax for 2016 financial year, pending the approval of the shareholders at the AGM. 25 RELATED PARTY TRANSACTIONS Advances include the following amounts lent to related parties Employees 2,961, ,676, Amenfiman Rural Bank - AGM 2016

39 Capital Allowance Computation for the year ended 31st December 2016 CAPITAL ALLOWANCE POOL 1 POOL 2 POOL 3 POOL 4 TOTAL 40% 30% 20% 10% 100% WDV B / Fwd 219, , , ,564, ,087, Additions 132, , , ,102, ,992, TOTAL 351, ,417, ,644, ,666, ,080, Less: Capital 140, , , , ,161, Allowance WDV C / Fwd 211, , ,315, ,399, ,918, SUMMARY OF CAPITAL ALLOWANCES Unutilised Allowances B / Fwd Capital Allowances 1,161, , Total Allowances 1,161, , Less: Allowances Utilised 1,161, , Unutilised Allowances C / Fwd Income Tax Computation for the year ended 31st December Net Profit before Tax 9,987, ,582, Add Back: Depreciation and Amortisation 902, , Provident Fund 309, , Impairment Allowance 604, , Assesable Income 11,803, ,830, Less: Capital Allowance 1,161, , Chargeable Income 10,641, ,066, Tax 10% 1,064, , Amenfiman Rural Bank - AGM

40 Capital adequacy for the year ended 31st december ITEM 1 Paid-Up Capital 1,754, ,542, Disclosed Reserves 21,366, ,305, Tier 1 Capital (1+2) 23,120, ,847, Less: 4 Goodwill/Intangibles Preliminary Expenses 5 Losses not Provided For 6 Investments in Unconsolidated Subsidiaries 115, , Investment in the capital of other Banks & Fin 128, , Insts. 8 Connected Lending of Long Term Nature 9 Net Tier 1 Capital ( ) 22,876, ,603, Add: 10 Revaluation Reserves 11 Subordinated Term Debt (Limited to 50% of 3) 12 Hybrid Capital 13 Tier 2 Capital ( )(Limited to 100% of 3) 14 ADJUSTED CAPITAL BASE (9 +12) 22,876, ,603, TOTAL ASSETS(Less contra items) 158,798, ,462, Less: 16 Cash on Hand 9,866, ,516, Claim on ARB Apex Bank: 17 i. 5% Deposit ARB 5,375, , ii. Clearing Account Balance 6,957, ,601, iii. ACOD ,000, iv. REPO Amenfiman Rural Bank - AGM 2016

41 Capital adequacy for the year ended 31st december 2016 Claims on Government 21 i) Treasury Securities (Bills and Bonds) 8,231, ,487, ii) Stocks Call Account 23 80% of Cheques drawn on other banks 24 Goodwill/Intangibles 25 Investments in Unconsolidated Subsidiaries 115, , Investments in the Capital of Other Banks & Fin 128, , Institutions 27 Connected Lending of Long Term Nature 28 80% of claims on Discount Houses 38,378, ,909, % of claims on Other Banks 26,473, ,472, % of claims on Other Insts. (Public Sector) 31 80% of loans guaranteed by government 32 80% of loans guaranteed by multilateral banks 33 50% of Residential Mortgage Loans 34 50% of Export Financing Loans 35 Adjusted Total Assets (15-(16+17 to 34) 63,272, ,856, Add: % of 3yrs Average Annual Gross Income 24,589, ,077, ADJUSTED ASSET BASE (35+36) 87,861, ,934, Adjusted Capital Base as percentage of Adjusted Asset Base: (14/37 x 100) 26.04% 24.79% 39 CAPITAL SURPLUS/DEFICIT (14 (10% of 35) 16,549, ,018, Amenfiman Rural Bank - AGM

42 Liquidity Ratio for the year ended 31St december Demand Deposit 25,822, ,483, Savings Deposit 84,095, ,571, Time Deposit 18,936, ,204, Sub-Total (1+2+3) 128,853, ,259, A PRIMARY 5 Cash on Hand 9,866, ,516, ACOD ,000, Other Banks Balances 14,061, ,133, Sub Total (5+6+7) 23,927, ,650, B SECONDARY 9 Call Account Other Investments 79,335, ,933, Treasury Bills 8,231, ,487, Total ( ) 87,567, ,420, Primary Reserve % of 8/ Secondary Reserve % of 12/ Required Reserves 15 Primary 13% ( of No. 4) 16,750, ,343, Secondary 30% (of No. 4) 38,656, ,177, EXCESS RESERVES Primary Reserve 17 Available Reserve (No. 8) 23,927, ,650, Required Reserve (No. 15) 16,750, ,343, Excess Reserve (17-18) (i) 7,176, ,306, Secondary Reserve 20 Available Reserve (No. 12) 87,567, ,420, Required Reserve (No. 16) 38,656, ,177, Excess Reserve (20-21) (ii) 48,911, ,242, TOTAL EXCESS/(DEFICIT) RESERVE Total Excess/(Deficit) Reserves (i) + (ii) 56,087, ,548, Amenfiman Rural Bank - AGM 2016

43 Schedule of Appendix APPENDIX I STAFF COST Salaries and Allowances 8,202, ,149, Social Security Fund Contribution 615, , Provident Fund (Tier 3) 309, , Staff Training Expenses 384, , Medical 103, , Other Staff Cost 1,759, ,247, TOTAL (PAGE 15) 11,374, ,440, APPENDIX II OCCUPANCY COSTS Electricity and Water 525, , Police Guard 530, , Rent, Rates and Taxes 218, , Generator Running Expenses 183, , Repairs and Maintenance 194, , TOTAL (PAGE 15) 1,652, ,131, Amenfiman Rural Bank - AGM

44 Schedule of Appendix APPENDIX III ADMINISTRATIVE EXPENSES Motor Running Expenses 678, , Printing and Stationery 212, , Insurance 253, , Business Promotion 356, , Subscriptions, Periodicals & Calendars 134, , SFC Expenses 109, , Transport and Travelling 851, , Specie Expenses 133, , Computerisation Expenses 378, , Directors Sitting Expenses 89, , Board Meeting Expenses 2, , AGM Expenses 180, , Postage, Telephone & Telegraph 85, , Bank Charges 212, , Office Expenses 700, , Legal Expenses 45, , Directors Transportation 88, , Mobilisation Expenses 488, , Motor Vehicle Repairs and Maintenance 456, , Cleaning & Sanitation 109, , Advertising and Publicity 281, , TOTAL (PAGE 15) 5,849, ,017, Amenfiman Rural Bank - AGM 2016

45 Notes... Amenfiman Rural Bank - AGM

46 Notes Amenfiman Rural Bank - AGM 2016

47 PROXY AUTHORISATION ANNUAL GENERAL MEETING of the 33rd Annual General Meeting of the Amenfiman Rural Bank Limited will be held on Saturday 24th June, 2017 at 10.00am prompt at the Assembly Hall of the Amenfiman Senior High School, Wasa Akropong. We... being members of... hereby appoint Dr./Hon./Mr./Mrs/.Ms./Rev... with a duly sealed proxy form to attend and vote for us and on our behalf at the Annual General Meeting of the Bank to be held on June 24, Dated this..day of Signature (Authorised Signatory ) Name:. Designation Company Seal/Stamp.. Signature (Authorised Signatory ) Name: Designation. Company Seal/Stamp Please Cut Along This Line Resolutions from the Board For Against 1. To receive the Chairman s statement and the Managing Director s report for the year ended 31 st December To consider and adopt the Financial Statements of the Company for the year ended 31 st December, 2016 together with the reports of the Directors and Auditors thereon. 3. To authorize the Directors to fix the remuneration of Auditors. 4. To fix the remuneration of Directors Please indicate with an X in the appropriate square how you wish your votes to be cast on the resolutions set out above. Unless otherwise instructed the proxy will vote or abstain from votting his/her discretion.

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