We are making small changes. to make a BIG impact. ANNUAL REPORT Amenfiman Rural Bank Limited AMENFIMAN. ruralbank

Transcription

1 We are making small changes to make a BIG impact 2015 ANNUAL REPORT Amenfiman Rural Bank Limited AMENFIMAN ruralbank

2

3 Contents General Information Chairman s Report Report of the Directors Statment of Directors Responsibilities Independent Auditors Report Statement of Comprehensive Income Statement of Cash Flows Statement of Changes in Equity 2014 & 2015 Statement of Financial Position Notes to the Financial Statements Capital Allowance and Income Tax Computations Capital Adequacy Liquidity Ratio Schedule Of Appendices Proxy Authorization Amenfiman Rural Bank Ltd. AGM

4 Corporate Information Board Of Directors Dr. Tony Aubynn Mr. Moses Ampong Mr. Justice Quaidoo Mr. Morgan Setordjie Mr. Eustace Kwesi Haizel Capt. Fred Quaah Afful (Rtd.) Mad. Agartha Cudjoe Chairman Vice - Chairman Director / Secretary Director Director Director Director Management Staff: Mr. Alex Asmah Mr. Jeremiah Baidoo Mr. Mark Aggrey Mr. Evans Aikens Mr. Patrick Darkwah Mr. Ebenezer Ankapong Mr. Anthony Adu-Broni Mr. Ken Amoah Mr. Dominic Antwi Chief Executive Officer Chief Internal Auditor Manager, Risk & Compliance Head-Oerations And Finance Head - Credit Head - ICT Head - HR Head Branch Network Operations Manager Auditors: K and A Accounting Services 49 Boundary Road (Coastal) Off Spntex 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 Ltd. AGM 2016

5 Board of Directors DR.TONI AUBYNN CHAIRMAN MR. MOSES AMPONG Vice Chairman. MR. JUSTICE QUAINOO Director / Secretary. Capt. FRED QUAAH AFFUL(Rtd) Director MR. EUSTACE KWASI HAIZEL Director / Solicitor. MR. MORGAN SETORDJIE Director MAD. AGARTHA CUDJOE Director Amenfiman Rural Bank Ltd. AGM

6 Management Team MR. ALEXANDER ASMAH CHIEF EXECUTIVE OFFICER MR. EVANS AIKINS Head: Finance & Operations MR. PATRICK DARKWAH Head: Credits MR. EBENEZER ANKAPONG Head: IT MR. JEREMIAH BAIDOO Chief Internal Auditor MR. MARK AGGREY Head: Risk & Compliance MR. DOMINIC ANTWI Operations Manager. MR. ANTHONY ADU-BRONI Human Resource MR. KENNEDY AMOAH Head: Branch Network CHARLCE DAMOAH Act. Branch Manager 6 Amenfiman Rural Bank Ltd. AGM 2016

7 Notice of Annual General Meeting NOTICE IS HEREBY GIVEN THAT the 32nd Annual General Meeting of the Amenfiman Rural Bank Limited will be held on Saturday 18th June, 2016 at 10.00am prompt at the Assembly Hall of the Amenfiman Senior High School, Wassa Akropong. AGENDA Ordinary Business By Ordinary Resolution 1. To receive the Report 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 Auditors Report and Approve the Financial Statement 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. Dated this 5th day of May, 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, P.O. Box 14, Wassa Akropong not less than 48hours before the appointed time of the meeting. By order of the Board... Anthony Justice Quaidoo (Board Secretary) Amenfiman Rural Bank Ltd. AGM

8 Report of the Chairman of The Board of Directors to the 32nd Annual General Meeting of Shareholders of Amenfiman Rural Bank Limited Held On 18th June, 2016 Distinguished shareholders, Fellow Board Members, Ladies and Gentlemen, I warmly welcome you all to the 32nd Annual General Meeting of the Amenfiman Rural Bank Limited, a leading rural bank in Ghana. It gives me great pleasure to present the Annual Report and Financial Statements of your Bank for the year ended 31st December, Macroeconomic Environment Ghana s economy experienced slow growth for the fourth consecutive years in The country could not achieve its GDP growth target of 5.2% but instead maintained a slower growth rate of 3.4% from the 3.3% in The slow performance of the economy was mainly due to the pressures from the energy crisis, high inflation, and the ongoing fiscal consolidation program impacting on the level of economic activities in the country. In addition, the unfavorable global economic conditions impacted on our economic growth as the world market prices of our country s two major export commodities of gold and oil fell significantly in It is worth mentioning that the more than 48% fall in the international price of gold in 2015 resulted in downsizing in most mining companies in the country. Since Amenfiman Bank operates in mining areas, the situation impacted negatively on our assets and earnings. Inflation was high at 17.7% in 2015 compared to a similar high rate of 17% in With high inflationary pressures coupled with further deterioration of the Ghana Cedi against the US dollars, the purchasing power of the people was weakened. Ladies and gentlemen, the Ghana cedi lost 18% of its value against the US dollar in 2015 though it maintained a relatively stronger performance against the Euro and the British pound. The central bank continued with the tightening of the monetary policy as the policy rate peaked at 26% by the end of Industry Development Ladies and Gentlemen, the regulatory challenges with the microfinance institutions in 2015 impacted negatively on the Microfinance sector of the banking industry. The situation has weakened public confidence in the Microfinance Sector and affected all the players in the industry including Rural and Community Banks leading to panic withdrawals in some rural banks. Distinguished Shareholders, I am happy to inform you that, due to prudent management and careful execution of our strategy, the Amenfiman brand did not experience the negative effects of this development in the sector. Ladies and Gentlemen, the rural banking sector continued to experience tightened regulations as the Bank of Ghana raised minimum capital requirements for the 8 Amenfiman Rural Bank Ltd. AGM 2016

9 rural banks to one million Ghana Cedis. The transition arrangements were that all licensed Rural/Community Banks are to raise their minimum paid-up capital to GH 300, (Three Hundred Thousand Ghana Cedis) by 31st December 2015, GH 500, (Five Hundred Thousand Ghana Cedis) by 31st December 2016 and GH 1.0 million (One Million Ghana Cedis) by 31st December It s my pleasure to inform you Distinguished Shareholders that our bank has already met and exceeded this requirement by closing the year with a paid up capital of over GH 1.5 Million. We will, however, not relent in our efforts to raise new capital to finance our growth strategy and take up new risks. Business Operating Performance In spite of the macroeconomic challenges in 2015, Amenfiman Bank posted yet another impressive financial results and provided value to shareholders. Distinguished Shareholders, the key business performance highlights below point to the fact that the strategy adopted by the board and management in 2015 was very successful. Our 2015 operating result is very inspiring and a good reflection of our vision and strategy to position the bank as an industry leader. Having grown deposit by 48% from GH 59.1 million in 2014 to GH 87.3 million in 2015, Investment by 71% from GH 31.7 million in 2014 to GH 55.5 million in 2015, the Bank made after tax profit of GH million in I can assure you, ladies and gentlemen that Amenfiman Bank is well positioned to lead the financial inclusion agenda to the next level. The following are the highlights of our financial performance for the year ended 31st December, 2015 Key Performance Indicators Profit Before Taxation 4,620, ,582, Profit After Taxation 4,225, ,078, Investments 31,717, ,504, Advances 25,923, ,321, Total Assets 73,177, ,462, Total Deposits 59,141, ,259, Shareholders Funds 9,863, ,847, Profit Before Taxation GH M Profit After Taxation GH M Investments Advances GH M GH M % 20% 75% 25% Amenfiman Rural Bank Ltd. AGM

10 Chairman s Report (Cont d) Total Assets Total Deposits Shareholders Fund % 48% 61% Operating Income Distinguished Shareholders, the Bank continued to improve on income generation during the year under review. Our total operating income for the year improved from GH 15,370,917 in 2014 to GH 21,246,744 in This is evidence that our range of products and services are competing favorably in the market. The board shall continue to support management to research and introduce more innovative products into the market. In view of this, I will be launching another innovative product called MEBA DAAKYE later at this meeting and I encourage all shareholders to be part of it. Operating Expenses The energy crisis, the hikes in the utilities, the rising costs of funds and the general challenging macroeconomic conditions that prevailed during the year under review greatly impacted on the business. In view of this, the operating expenses went up from GH 10,546,634 in 2014 to GH 15,347,789 in The Board and Management will find innovative ways to control expenditure without compromising on the quality of service to our customers. Profitability The bank made significant strides to maintain the leadership position in the industry. It is my pleasure to inform you that your Bank made a respectable profit GH 5,582,248 as against prior year profit of GH 4,620, This represents 20% growth over that of The Bank paid a total of GH 503,316 as corporate tax for the year. This achievement was a reflection of a successful implementation of strategies adopted in The Board will continue to work with management to push forward our well thought through Expansion strategy. Distinguished Shareholders, the Board will continue to make sound decisions on your behalf regarding your investment in the bank so as to generate more value for you. 10 Amenfiman Rural Bank Ltd. AGM 2016

11 Chairman s Report (Cont d) Deposit The Bank s total deposits grew significantly during the year 2015 from GH 59.1 million to GH 87.3 million representing 48% of the 2014 performance. Even though government domestic borrowings resulted in high interest rates on treasury bills during the year under review, our strategy worked well for us as our staff demonstrated outstanding commitment to deposit mobilization. We continue to enjoy growing loyalty from our customers and we believe that through innovation and service excellence, we will make more exploits in Ladies and Gentlemen, permit me to extend my heartfelt appreciation and congratulations to the management and staff for this feat and encourage them to keep it up. Total Assets Distinguished Shareholders, the value of our business went up significantly during the year. Our balance sheet grew from GH 73.1 million in 2014 to GH million in The growth was supported by high deposit mobilization and profitability. Paid up Capital grew by 36% from GH 1.1 million to GH 1.5 million, Income Surplus by 80% from GH 5.5 million to GH 9.9 million and Owners Worth by 40% from GH 9.8 million to GH 15.8 million from 2014 to This is indeed very impressive especially against the backdrop of generally unfavorable macroeconomic conditions, which prevailed during We are grateful to the Management team and the Staff for this sterling performance. Proposed Dividend Distinguished shareholders, as you are well aware, your Bank is doing very well, growing from strength to strength. In line with our policy to pay appropriate financial returns on your investment as the business continues to grow, it is with much pleasure that I propose an increase in dividend per share from GH per share to GH per share. This is a reflection of our growth and in line with our general philosophy of distributing benefit of our success to stakeholders. This implies a 25% return on your investment considering a share price of GH 0.20 per share. Ladies and Gentlemen I can assure you that it is the best deal you can get anywhere in the world and so I encourage all shareholders to continue to purchase more shares to top up your existing shareholdings. We wish to assure you that the Board will continue to make decisions and investments that will be in the best interest of shareholders. Loans and Advances The Bank is making significant strides in the rural financial intermediation process. We aim at boosting economic development especially in the rural communities by promoting access to credit for all and sundry. In view of this, a total of GH 46 million was given out as loans to deserving customers to business growth and boost entrepreneurship development in our communities. Amenfiman Rural Bank Ltd. AGM

12 Chairman s Report (Cont d) I am happy to announce that GH 66 million has been earmarked for loans in 2016 to deserving customers especially to our farmers. This year, we are running a special program for the farmers to increase their yield and expand their farms through access to credit. Retirement of Directors Distinguished Shareholders, in line with section 298(a) of the companies code 1963, Act 179, one of the directors who is due to retire on rotation has offered himself to be re-elected as a director and has accordingly filed his application. He is the Bank s lawyer and Solicitor Lawyer Eustace Kwesi Haizel. Awards and Other Achievements During the year under review, Amenfiman Bank was recognized and rewarded by several reputable organizations for the Bank s contribution to society and banking practice. In addition, the Board Chairman and the Chief Executive Officer also received several awards for their role in improving the fortunes of the Bank. The following are but few of the awards received during the year Ghana Club 100 Awards Ladies and Gentlemen, Amenfiman Bank was once again recognized by the Ghana Investment Promotion Center in the prestigious Ghana Club100 awards. In the award ceremony held last year, your Bank improved significantly in the rankings of prestigious high performing companies from the 35th position held earlier to the 16th Position. This is a very enviable feat which deserves every commendation. Business and Financial Services Excellence Award A national award ceremony organized under the auspices of the Ministry of Trade to recognize the contribution of business and financial service providers to trade and industry in Ghana, Amenfiman Bank received awards at the Gold and Silver categories for Deposit Mobilization and Customer Advisory Services respectively. These awards were in recognition of the Bank s contribution to business and the rural economy. United Nations Millennium Gold Medal During the celebration of the United Nations Millennium Development Goals (MDGs) in September 2015, Amenfiman Bank was awarded International Millennium Medal for its contribution to achieving the MDGs in areas such as reduction of extreme hunger and poverty, Improvement in Health Care and Maternal Mortality, and providing universal Primary Education for all school going age. The Civilian Institute of Democratic Administration CIDA Ghana During the year under review the Board Chairman and the Chief Executive Officer were recognized by CIDA Ghana for their meritorious roles in transforming the Bank and advancing the course of humanity. The colorful award ceremony held in Tema was in the form of induction as Fellows of CIDA (FCIDA) alongside other prominent 12 Amenfiman Rural Bank Ltd. AGM 2016

13 Chairman s Report (Cont d) personalities in Ghana and elsewhere. ARB Apex Bank Performance Ranking and Bank of Ghana Composite Ratings Due to the sterling performance, 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. Corporate Social Responsibilities/Amenfiman Scholarship Scheme Distinguished Shareholders, in line with the policy to give 5% of profits back to society on annual basis, the board has set aside an amount of GH 253,945 for social responsibility programs. The funds will support education, health, and sanitation and other self-help projects. The Amenfiman scholarship scheme continue to provide financial support to needy but brilliant children to further their education at the secondary school level. Human Resource Development Ladies and Gentlemen, I believe strongly that our greatest strength has been the competency of our management and staff. As a Board, our promises and decisions are as good as the human resource who will make them happen. We continue to make investments in our employees, and reward them competitively for their dedicated service to the bank. In view of that the Board of Directors and Management has introduced another novelty to the rural banking system. We recently launched the first batch of Amenfiman Talents into the AMERB Talent Academy Program (a-tap). The aim of the program is to provide solid leadership, managerial and competency based training to prepare our own people to take responsible roles in the Bank. This strategy will position the bank to compete favorably in the future having the right people to do the right job at the right time. I wish to take this opportunity to express our gratitude to management and staff for their hard work and pledge the Board s continuous support in the years ahead. Branch Network Expansion Distinguished Shareholders, I am happy to inform you that our branch network and modernization plan is very much on course. This well thought through strategy will propel the Bank to achieve greater results in the future. Early this year, I had the greatest honor to inaugurate our new and flagship Kumasi Santasi branch located at Apire Junction in Santasi. Arguably, this is the first time any rural bank has been allowed to establish a branch across two regions. On behalf of Amenfiman, I would like to thank the Bank of Ghana for taking such an innovative position on its policy of rural bank location. This new addition brings to 12, the number of fully networked branches and 4 mobilization centers. The Bank also renovated the Asankrangwa High Street branch to the status of a modern banking facility. In addition, the construction of the Bawdie office is over 80% complete and will be opened to the public in due course. Contract has Amenfiman Rural Bank Ltd. AGM

14 Chairman s Report (Cont d) been awarded for the construction of the Manso Amenfi branch office and work is progressing steadily. It is sad that due to litigations on the parcel of land situated adjacent the old bank and opposite the police station which was earmarked for the construction of the Wasa Akropong High Street branch has not seen the light of day. The Board will do everything possible to secure the land for the construction of the Bank. Marketing Communication Distinguished Shareholders, Amenfiman is taking seriously the power of marketing communication to consolidate the strength of the Amenfiman brand. In view of this, the Board has approved a modification to the existing logo to reflect our future aspirations. At this stage of the rebranding program, our main focus is on brand identity and visibility. Through efficiency, service, and strong relationships, we will ride on the back of the brand to gain more credibility in the market. Outlook for 2016 Nananom, Distinguished Shareholders, Ladies and Gentlemen, as the government s fiscal consolidation program enters its second year and having achieved a three percentage points reduction in fiscal deficit to 7.1% in 2015, economic pundits are already raising expectations of higher economic growth in This is on the back of seemingly improved energy crisis and a rise in international gold price. However, with the recent hikes in utilities coupled with the inflationary challenges of an election year, cost of doing business generally is expected to go up again which will affect the profitability of companies both small and big. Again, the government has shown intentions to increase domestic borrowing to refinance some of its debts which have consequences on deposit mobilization as the government compete for domestic funds with the banks. With policy rate already peaked at 26%, and inflation at 18.2%, cost of funds is also expected to go up further as fund owners ask for more interest on their funds. At Amenfiman Bank, our business focus in 2016 is on driving growth, innovations, efficiency and service as the main pillars in achieving profitability and market leadership in We will push for more market penetration as we develop new markets and build a stronger, improved and trusted relationships with our clients. As always, with prudent management of resources and hard work of our employees, 2016 will be another good year. At the risk of sounding repetitive, I would like to reiterate the call I made almost 11 years ago and for which I repeat every year, for government to critically review its position on how some government s statutory payments/receipts, particularly the District Assemblies Common Funds are routed only through specific banks to the exclusion of the Rural Banks. I believe that Rural Banks such as Amenfiman has come of age and are well able to handle these payments. Here at the Amenfi East 14 Amenfiman Rural Bank Ltd. AGM 2016

15 Chairman s Report (Cont d) District Assembly, the only viable bank is Amenfiman. We contribute directly to local community development, yet the DCE has to travel to Dunkwa or Bogoso to access the Common Fund payment. I am told government is seriously looking at this suggestion, for which we are appreciative. But for how long! Conclusion Nananom, Fellow Shareholders, Ladies and Gentlemen, we have a good story to tell about our Bank and we must all be proud of our collective achievements. The Lord has been good to us and our business and we are thankful. We couldn t have made these strides without the support of the Board Members, Management and the entire staff. I would, at this juncture, like to thank my fellow directors for your passionate and committed leadership and vision.. To management and the entire staff whose hard work and commitment have seen the bank grow from strength to strength, I say ayekoo. As Board, Management and staff, we cannot but be very proud of our achievements but we have promised ourselves not to rest on our oars. We will continue to deliver value for our stakeholders. To you, our distinguished shareholders, I salute you and thank you for your continued interest in the Bank. Finally, I say Ayekoo to all our cherished customers, consultants and partners for your support and loyalty. Amenfiman Bank, your success, our pride Thank you Amenfiman Rural Bank Ltd. AGM

16 Report of the Directors The Directors have the pleasure in submitting their Thirty-Second annual report together with the audited financial statements of the Bank for the year ended 31st December, 2015 to the members as follows: a. 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. b. Operational Results The results of operations for the year ended 31st December, 2015 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 25. A summary of the results is as follows: GH GH Profit After Tax 5,078, ,225, Total Comprehensive Income 23,226, ,672, Total Assets 105,462, ,586, c. 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. 16 Amenfiman Rural Bank Ltd. AGM 2016

17 Operational Results 2015 (GH ) 2014 (GH ) % CHANGE Income 23,226, ,672, Expenses 18,147, ,446, Net Profit 5,078, ,225, % % Staff Cost to Income Occupancy Cost to Income 5 6 Administrative Expenses to Income Total Expenses to Income Net Profit to Income Income Expenses Net Profit GH M GH M GH M % 45.80% 20.20% Expenses to Income 17% 19% Administrative Administrative 22% Net Profit 25% Net Profit 5% Occupancy 41% 6% 36% Staff Cost Occupancy Staff Cost Amenfiman Rural Bank Ltd. AGM

18 Statement of Directors Responsibilities The Companies Act of Ghana, 1963 (Act 179) and the Banking Act 2004 (Act 673) 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 and of the profit or loss for that year. In preparing the financial statements, the Directors are required to: Select suitable accounting policies in accordance with International Financial Reporting Standards and to apply them consistently; Make judgments and estimates that are reasonable and prudent; State whether applicable accounting standards have been followed, subject to any material departures, disclosed and explained in the financial statements; Prepare the financial statements on a going concern basis unless it is inappropriate to presume that the company will continue in business. The Directors are responsible for the preparation of the Financial Statements in accordance with the International Financial Reporting Standards and ensuring that the company keeps accounting records which disclose with reasonable accuracy the financial position of the company and which enable them to ensure that the financial statements comply with the Companies Act 1963 (Act 179) and the Banking Act 2004 (Act 673). They are also responsible for safeguarding the assets of the Bank and hence for taking steps for the prevention and detection of fraud and other irregularities, as well as designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of Financial Statements that are free from material misstatements. The above statement, which should be read in conjunction with the report of the Auditors, is made with the view to distinguishing for shareholders the respective responsibilities of the Directors and the Auditors in relation to the financial statements. 18 Amenfiman Rural Bank Ltd. AGM 2016

19 Amerb Meba Daakye ACCOUNT Set your child s future in motion with the Amerb mebadaakye account. This product is designed to help parents and guardians plan the financial life of their wards. This account would be held in trut until the child is 18 years REQUIRMENTS: Birth Certificate of child Fully Completed Amerb Meba Daakye Account Openning Form. Free capture of two passport pictures each of parents and child Fully Completed Amerb Meba Daakye Account Soft Mandate Form Address verification ( Utility bill not exceeding 3 months) Amenfiman Rural Bank Ltd. AGM

20 Auditors Report to the Members of Amenfiman Rural Bank Limited Report on the Financial Statements We have audited the accompanying financial statements of Amenfiman Rural Bank Limited, which comprise the Statement of Financial Position as of 31st December 2015, Statement of Comprehensive Income, Statement of Cash Flows and Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and explanatory notes. Directors Responsibility for the Financial Statements Directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards and the Companies Act, 1963 (Act 179). 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. 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 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 risks assessments, the auditor considers internal controls 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. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the 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. 20 Amenfiman Rural Bank Ltd. AGM 2016

21 Auditors Report to the Members of Amenfiman Rural Bank Limited (Cont d) Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of Amenfiman Rural Bank Limited as of 31st December 2015, 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, 1963 (Act 179) of Ghana, Section 78 of the Banking Act, 2004 (Act 673) and Banking (Amendment) Act 2007 (Act 738) of Ghana. Report on Other Legal and Regulatory Requirements Compliance with the requirements of Section 133 of the Companies Act 1963, (Act 179) i. We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purpose of our audit; ii. In our opinion, proper books of account have been kept, and the statement of financial position and statement of Comprehensive income are in agreement with the books of account.... Signed by: Kwadwo Kwarteng (ICAG/P/1269) For and on behalf of: K a nd A A c c ount ing s er vic e s ( I C AG / F/ 2015 /0 8 9 ) Chartered Accountants 49 Boundary Road (Coastal) Off Spintex Road, Baatsonaa- Accra. Date Amenfiman Rural Bank Ltd. AGM

22 Statement of Comprehensive Income for the year Ended 31st December 2015 NOTE GH GH Interest Income 3 20,710, ,481, Interest Expense 4-1,980, ,301, Net Interest Income 18,730, ,180, Commissions and Fees 5 2,044, ,961, Other Operating Income 6 472, , Total Operating Income 21,246, ,370, Impairment Allowance 7-316, , Other Operating Expenses 8-15,347, ,546, Profit Before Tax 5,582, ,620, Taxation , , Net Profit After Tax 5,078, ,225, Transfer to Proposed Dividend , Transfer to Statutory Reserve -634, , Transfer to Income Surplus -2,945, ,173, Transfer to Community Development Fund -152, , Scholarship Fund -101, , Pension Fund -50, , Building Fund -1,193, , Notes 1-31 form an intergral part of these financial statements. Auditors Report - Page Amenfiman Rural Bank Ltd. AGM 2016

23 Statement of Cashflow for the year ended 31st December 2015 CASHFLOW FROM OPERATING ACTIVITIES GH GH Net Profit Before Tax 5,582, ,620, ADJUSTMENTS TO RECONCILE OPERATING PROFIT TO NET CASH PROVIDED BY OPERATING ACTIVITIES Depreciation and Amortisation 683, , Charge for Loan Impairment 316, , Deferred Income 328, Other non cash movement -431, NET CASH PROVIDED BY OPERATING ACTIVITIES BEFORE CHANGES IN OPERATING ASSETS AND LIABILITIES 6,478, ,267, (Increase)/ Decrease in Loans and Advances to Customers -6,567, ,942, (Increase)/ Decrease in Other Assets 3,086, ,562, Increase/ (Decrease) in Deposits Liability 28,117, ,042, Increase/ (Decrease) in Creditors and Accruals -1,719, , ,396, ,424, Corporate Tax Paid -435, , NET CASH INFLOW FROM OPERATING ACTIVITIES 28,960, ,869, INVESTING ACTIVITIES Government Securities -23,786, ,693, Purchase of Property, Plant and Equipment -2,350, ,291, NET CASH (OUTFLOW) FROM INVESTING ACTIVITIES -26,136, ,984, FINANCING ACTIVITIES Capital Reserve 1,474, Other funds -967, ,230, Proceeds from Issue of Shares 399, , Other Loans -166, , NET CASH (OUTFLOW) FROM FINANCING ACTIVITIES 739, ,012, Net Increase / (Decrease) in Cash and Cash Equivalents 3,563, ,128, Cash and Cash Equivalents as at 1/1/2015 9,086, ,215, Cash and Cash Equivalents as at 31/12/ ,650, ,086, Amenfiman Rural Bank Ltd. AGM

24 Statement of Changes in Equity for the year ended 31st December 2015 Stated Capital Other Funds Statutory Reserves Income Surplus Total GH GH GH GH GH 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, , , , Transfer to Other Funds - 1,498, ,498, Transfers to Stated Capital Balance as at December ,542, ,068, ,289, ,947, ,847, Statement of Changes in Equity for the year ended 31st December 2014 Stated Capital Other Funds Statutory Reserves Income Surplus Total GH GH GH GH GH Balance as at January 1 1,092, ,522, ,126, ,330, ,071, Net Profit for the Year - 16, , ,173, ,717, Prior Year Adjustment , , Proceeds from Issue of Shares Balance as at December 31 50, , ,142, ,538, ,654, ,527, ,863, Amenfiman Rural Bank Ltd. AGM 2016

25 Statement of Financial Position as at 31st December 2015 ASSETS NOTE GH GH Cash and Short Term Funds 9 12,650, ,086, Investments 10(a) 55,504, ,717, Loans and Advances to Customers 11 32,321, ,923, Other Assets Account 12(a) 1,429, ,516, ,905, ,244, Other Investments , , Property, Plant & Equipment 14 3,312, ,688, TOTAL ASSETS 105,462, ,177, LIABILITIES AND SHAREHOLDERS' FUND LIABILITIES Deposits and Current Accounts 15 87,259, ,141, Creditors and Accruals 16 2,340, ,060, Other Liabilities Current Tax 17(a) -3, , Deferred Tax 17(b) 17, ,614, ,148, Other Loans , TOTAL LIABILITIES 89,614, ,314, SHAREHOLDERS' FUNDS Stated Capital 22 1,542, ,142, Statutory Reserve 23 2,289, ,654, Other Funds 24 2,068, ,538, Income Surplus 25 9,947, ,527, TOTAL SHAREHOLDERS' FUNDS 15,847, ,863, TOTAL LIABILITIES AND SHAREHOLDERS' FUNDS 105,462, ,177, Approved by the Directors on.. and signed by; CHAIRMAN DIRECTOR Notes 1-31 form an intergral part of these financial statements Independent Auditors Report - Page 1-2 Amenfiman Rural Bank Ltd. AGM

26 Notes to the Financial Statements for the year ended 31st December 2015 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), 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. 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 41. Effects of Transition to IFRS The transition from Ghana National Accounting Standards (GNAS) to IFRS resulted in changes in the Equity at the date of transition and the end of the comparative period as well as reported results of the comparative period. In accordance with IFRS 1, First time adoption of international financial reporting standards, the changes are explained in the reconciliation statements below: a. Reconciliation of Profit 2014 GH Pre-tax profit under previous GNAS 4,620, Deferred portion of Fee Income (214,625.63) Pre-tax profit under IFRS 4,405, Amenfiman Rural Bank Ltd. AGM 2016

27 Notes to the Financial Statements for the year ended 31st December 2015 (Cont d) b. Reconciliation of Equity 2014 GH Total Equity under previous GNAS 9,863, Deferred portion of Fee Income (214,625.63) Total Equity under IFRS 9,648, 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: 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. Functional and Presentation Currency The financial statements are presented in Ghana Cedi (GH ) which is the functional and presentation currency of the Bank. 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 are credited upon collection. 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 Amenfiman Rural Bank Ltd. AGM

28 Notes to the Financial Statements for the year ended 31st December 2015 (Cont d) 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. 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: (a) financial assets measured at fair value through profit or loss (b) financial liabilities at fair value through profit or loss (c) financial assets measured at amortised cost (d) financial liabilities measured at amortised cost (e) 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. 28 Amenfiman Rural Bank Ltd. AGM 2016

29 Amenfiman Rural Bank Ltd. AGM

30 Notes to the Financial Statements for the year ended 31st December 2015 (Cont d) 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 A financial asset or financial liability is deemed to be held for trading if i. it 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. 30 Amenfiman Rural Bank Ltd. AGM 2016

31 Notes to the Financial Statements for the year ended 31St December 2015 (Cont d) (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. 2.7 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 Amenfiman Rural Bank Ltd. AGM

32 Notes to the Financial Statements for the year ended 31St December 2015 (Cont d) 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 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 32 Amenfiman Rural Bank Ltd. AGM 2016

33 Notes to the Financial Statements for the year ended 31St December 2015 (Cont d) 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% Generator Set 25% Motor Cycles 20% Safe1 5% Computer 20% 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 Amenfiman Rural Bank Ltd. AGM

34 Notes to the Financial Statements for the year ended 31St December 2015 (Cont d) 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 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, 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. Wherediscounting 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. 34 Amenfiman Rural Bank Ltd. AGM 2016

35 Notes to the Financial Statements for the year ended 31St December 2015 (Cont d) 2.16 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 shortterm 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. 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 4.5% of their basic salary to the Fund whilst the Bank contributes 12%. 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 deals with the classification and measurement of financial assets. The following are changes from the classification and measurement rules of IAS 39: Amenfiman Rural Bank Ltd. AGM

36 Notes to the Financial Statements for the year ended 31St December 2015 (Cont d) Financial assets will be categorised as those subsequently measured at fair value or atamortised cost. Financial assets at amortised cost are those financial assets where the business modelfor managing the assets is to hold the assets to collect contractual cash flows (where thecontractual cash flows represent payments of principal and interest only). All other financialassets 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 wholeinstrument is classified in accordance with IFRS 9, without separation of the embeddedderivative. In other circumstances, the provisions of IAS 39 still apply. Voluntary reclassification of financial assets is prohibited. Financial assets shall be reclassifiedif the entity changes its business model for the management of financial assets. In suchcircumstances, reclassification takes place prospectively from the beginning of the firstreporting period after the date of change of the business model. Investments in equity instruments may be measured at fair value though. When such anelection is made, it may not subsequently be revoked, and gains or losses accumulated inequity are not recycled to profit or loss on de-recognition of the investment. The election maybe 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 Ltd. AGM 2016

37 Notes to the Financial Statements for the year ended 31st December 2015 (Cont d) INTEREST INCOME GH GH Advances 12,141, ,393, Investment 8,568, ,088, TOTAL (PAGE 3) 20,710, ,481, INTEREST EXPENSE Interest on Deposit 1,976, ,301, Interest on Borrowing 3, TOTAL (PAGE 3) 1,980, ,301, COMMISSONS AND FEES Commitment Fees 656, , Commission Received 1,387, ,102, TOTAL (PAGE 3) 2,044, ,961, OTHER OPERATING INCOME Other Income 472, , TOTAL (PAGE 3) 472, , IMPAIRMENT ALLOWANCE Current Provision 692, , Previous Provision 850, , Bad Debts Written Off -475, , , TOTAL (PAGE 3) 316, , OTHER OPERATING EXPENSES Staff Cost (Appendix I) 9,440, ,927, Occupancy Costs (Appendix II) 1,131, , Administrative Expenses (Appendix III) 4,017, ,105, Directors' Remuneration 33, , Audit Fees 15, , Consultancy Fees 2, Depreciation and Amortisation 683, , Micro Finance Expenses 24, , TOTAL (PAGE 3) 15,347, ,546, Amenfiman Rural Bank Ltd. AGM

38 Notes to the Financial Statements for the year ended 31st December 2015 (Cont d) 9 CASH AND SHORT TERM FUNDS GH GH Cash on Hand 5,516, ,341, ARB Apex Bank 6,338, ,471, Balances with Other Banks 795, ,273, TOTAL (PAGE 4) 12,650, ,086, (a) INVESTMENTS IN SHORT TERM SECURITIES Treasury Bills 10,833, ,308, ACOD 2,000, ,000, Discount Receivable on Treasury Bills 653, , Other Investments 45,933, ,288, Unearned Income on Investment -3,915, TOTAL (PAGE 4) 55,504, ,717, 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 2015 GH GH GH Cash and Short Term Funds - 12,650, ,650, Investments 55,504, ,504, Loans and Advances to Customers Cash and Short Term Funds ,321, ,321, ,825, ,650, ,476, ,086, ,086, Investments 31,717, ,717, Loans and Advances to Customers 10(c) FINANCIAL LIABILI- TIES BY CATEGORY Deposits and Current Accounts Deposits and Current Accounts 25,923, ,923, ,641, ,086, ,728, ,259, ,259, ,141, ,141, Amenfiman Rural Bank Ltd. AGM 2016

39 11 LOANS AND ADVANCES TO CUSTOMERS Analysis by type of Customer: GH GH Individuals 20,141, ,099, Other private enterprises 11,523, ,198, Staff 1,676, , ,342, ,774, Deferred Fee Income -328, Impairment Allowance -692, , ,321, ,923, Analysis by Sector: Agriculture, Forestry & Fishing 397, , Trading 15,608, ,293, Transport, Storage & Communication 552, , Miscellaneous 16,783, ,696, ,342, ,774, Deferred Fee Income -328, Impairment Allowance -692, , ,321, ,923, Analysis by type of Advance: Loans 30,872, ,864, Overdraft 2,469, ,910, ,342, ,774, Deferred Fee Income -328, Impairment Allowance -692, , TOTAL (PAGE 4) 32,321, ,923, (a) OTHER ASSET ACCOUNTS Stationery Stocks 90, , Sundry Debits ,096, Prepaid Rent 593, , Prepaid Insurance 26, , Interbranch Account 52, , Office Account 667, , Uncleared Effects , TOTAL (PAGE 3) 1,429, ,516, OTHER INVESTMENTS GH GH Werba Investment 115, , ARB Apex Bank Shares 128, , TOTAL (PAGE 4) 244, , Amenfiman Rural Bank Ltd. AGM

40 14 PROPERTY, PLANT AND EQUIPMENT "COST/ VALUATION Vehicle" "ACCUMULATED DEPRECIATION Vehicle" "CARRYING AMOUNT Vehicle" "COST/ VALUATION Vehicle" "ACCUMULATED DEPRECIATION Vehicle" "CARRYING AMOUNT Vehicle" GH GH GH GH GH GH Land & Building 1,928, (104,843.35) 1,823, , (93,107.59) 367, Motor Vehicle 1,357, (822,580.94) 534, , (456,565.39) 426, Furniture & Equipments 979, (568,143.51) 410, , (438,858.35) 394, Computers 787, (382,160.11) 405, , (284,931.68) 323, Safe 52, (35,669.34) 16, , (30,027.71) 22, Generator 370, , , , , , ,475, ,163, ,312, ,169, ,480, ,688, RECONCILIATION OF OPENING CARRYING VALUES WITH CLOSING CARRYING VALUES 2015 OPENING BALANCE ADDITIONS DISPOSALS DEPRECIATION CLOSING BALANCE GH GH GH GH GH Land & Building 367, ,511, , , ,928, Motor Vehicle 426, , , ,357, Furniture & Equipments 394, , , , Computers 323, , , , Safe 22, , , Generator 155, , , , ,688, ,350, , ,480, ,475, Amenfiman Rural Bank Ltd. AGM 2016

41 Notes to the Financial Statements for the year ended 31st December 2015 (Cont d) DEPOSITS AND CURRENT ACCOUNTS GH GH Savings Accounts 57,571, ,424, Current Accounts 17,483, ,453, Time Deposits 12,204, ,264, TOTAL (PAGE 3) 87,259, ,141, CREDITORS AND ACCRUALS Sundry Creditors 602, ,678, Audit Fee 15, , Consultancy Fee 2, Office Accounts 1,173, , Dividend Payable 547, , Propsoed Dividend , TOTAL (PAGE 3) 2,340, ,060, (a) TAXATION - CURRENT Year "Opening Balance" "Tax Charged" "Tax Paid" "Closing Balance" GH GH GH GH , , , , , , , , , , , , , , , (b) DEFERRED TAX "Opening Balance" Prior Year Adjustment "Tax Charged" "Closing Balance" GH GH GH GH , , , , Amenfiman Rural Bank Ltd. AGM

42 Notes to the Financial Statements for the year ended 31st December 2015 (Cont d) (c) RECONCILIATION OF TAX EXPENSE TO PRODUCT OF ACCOUNTING PROFIT AND APPLICABLE RATE Profit Before Taxation 5,582, ,620, Adjusted Pre-Tax Profit 5,582, ,620, Tax at Applicable 8% 446, , Add/ Deduct: Tax Effect of Non-Deductible Expenses 99, , Tax Effect of Capital Allowances -61, , Add Origination of Temporary Differences 17, TOTAL TAX EXPENSE 503, , Effective Tax Rate 9.02% 8.55% GH GH 18 OTHER LOANS Short Term Borrowing , The amount of GH 166, represents the balance of GH 1,000, credit given to the Bank by ARB Apex Bank with an interest rate of 20% per annum. 19 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 1,998,337 ordinary shares for cash consideration of Gh 399, AUTHORISED Number of Shares of No Par Value ORDINARY 20,000, ISSUED AND FULLY PAID ORDINARY ORDINARY Number GH Number GH For Cash 6,703,559 1,142, ,703,559 1,092, Issued for the Year 1,998, , ,075 50, Preference Shares 125, , TOTAL (PAGE 4) 8,826,896 1,542, ,065,634 1,142, There is no share in treasury and no call or instalments unpaid on any share. 42 Amenfiman Rural Bank Ltd. AGM 2016

43 Notes to the Financial Statements for the year ended 31st December 2015 (Cont d) 20. 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). 21. CAPITAL SURPLUS:There were no capital surplus at the balance sheet date. 22. INCOME SURPLUS: This represents the residual of cumulative annual profits that is available for distribution to shareholders. 23. MICRO-CAPITAL GRANT - UNDP: There were no Micro - capital grants as at the balance sheet date. 24. CONTINGENCIES AND CAPITAL EXPENDITURE COMMITMENTS: There were neither contingent liabilities nor contingent assets as at the balance sheet date. 25. CAPITAL EXPENDITURE COMMITMENTS: There were no capital commitments as at the balance sheet date. 26. PROPOSED DIVIDEND: The Board of Directors of the Bank have passed a resolution to propose dividend of GH 0.05 per share which amounted to GH 435, in respect of the profit ater tax for 2015 financial year, pending the approval of the shareholders at the AGM. 27. RELATED PARTY TRANSACTIONS: Advances include the following amounts lent to related parties GH GH Employees 1,676, , Amenfiman Rural Bank Ltd. AGM

44 Capital Allowance Computation for the year ended 31st December 2015 POOL 1 POOL 2 POOL 4 POOL 5 TOTAL GH GH GH GH GH Capital Allowance 40% 30% 20% 10% WDV B / Fwd 186, , , , ,544, Additions 179, , , ,511, ,350, Adjustment , , TOTAL 366, , , ,737, ,851, Less: Capital Allowance 146, , , , , WDV C / Fwd 219, , , ,564, ,087, SUMMARY OF CAPITAL ALLOWANCES GH GH Unutilised Allowances B / Fwd Capital Allowances 763, , Total Allowances 763, , Less: Allowances Utilised 763, , Unutilised Allowances C / Fwd Income Tax Computation for the Year ended 31st December 2015 Net Profit before Tax 5,582, ,620, Add Back: Depreciation and Amortisation 683, , Provident Fund 248, , Impairment Allowance 316, , GH GH 1,248, , Assesable Income 6,830, ,446, Less: Capital Allowance 763, , Chargeable Income 6,066, ,936, Tax 8% 485, , Amenfiman Rural Bank Ltd. AGM 2016

45 Capital Adequacy for the year ended 31st December GH GH ITEM 1 Paid-Up Capital 1,542, ,142, Disclosed Reserves 14,305, ,720, Tier 1 Capital (1+2) 15,847, ,863, 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 Insts. 8 Connected Lending of Long Term Nature 128, , Net Tier 1 Capital ( ) 15,603, ,618, 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) 15,603, ,618, TOTAL ASSETS(Less contra items) 105,462, ,177, Less: 16 Cash on Hand 5,516, ,341, Claim on ARB Apex Bank: 17 i. 5% Deposit ARB 3,736, ,490, ii. Clearing Account Balance 2,601, , iii. ACOD 2,000, ,000, Amenfiman Rural Bank Ltd. AGM

46 Capital Adequacy for the year ended 31st December 2015 (Cont d) 20 iv. REPO Claims on Government 21 i) Treasury Securities (Bills and Bonds) 11,487, ,429, 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 Institutions 27 Connected Lending of Long Term Nature 28 80% of claims on Discount Houses 128, , % of claims on Other Banks 37,382, ,449, % 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) 42,493, ,241, Add: % of 3yrs Average Annual Gross Income 17,149, ,837, ADJUSTED ASSET BASE (35+36) 59,642, ,079, "Adjusted Capital Base as percentage of Adjusted Asset Base: (14/37 x 100) " 26.16% 19.60% 39 CAPITAL SURPLUS/DEFICIT (14 (10% of 35) 11,354, ,894, Amenfiman Rural Bank Ltd. AGM 2016

47 Liquidity Ratio for the year ended 31st December GH GH 1 Demand Deposit 17,483, ,453, Savings Deposit 57,571, ,424, Time Deposit 12,204, ,264, Sub-Total (1+2+3) 87,259, ,141, A PRIMARY 5 Cash on Hand 5,516, ,341, ACOD 2,000, ,000, Other Banks Balances 7,133, ,744, Sub Total (5+6+7) 14,650, ,086, B SECONDARY 9 Call Account Other Investments 45,933, ,288, Treasury Bills 11,487, ,308, Total ( ) 57,420, ,596, Primary Reserve % of 8/ Secondary Reserve % of 12/ Required Reserves 15 Primary 13% ( of No. 4) 11,343, ,688, Secondary 30% (of No. 4) 26,177, ,742, EXCESS RESERVES Primary Reserve 17 Available Reserve (No. 8) 14,650, ,086, Required Reserve (No. 15) 11,343, ,688, Excess Reserve (17-18) (i) 3,306, ,398, Amenfiman Rural Bank Ltd. AGM

48 Liquidity Ratio for the year ended 31st December 2015 (Cont d) Secondary Reserve 20 Available Reserve (No. 12) 57,420, ,596, Required Reserve (No. 16) 26,177, ,742, Excess Reserve (20-21) (ii) 31,242, ,854, TOTAL EXCESS/(DEFICIT) RESERVE Total Excess/(Deficit) Reserves (i) + (ii) 34,548, ,252, Amenfiman Rural Bank Ltd. AGM 2016

49 Schedule of Appendixes APPENDIX I GH GH STAFF COST Salaries and Allowances 7,149, ,615, Social Security Fund Contribution 485, , Provident Fund 248, , Staff Training Expenses 235, , Medical 74, , Other Staff Cost 1,247, , TOTAL (PAGE 16) 9,440, ,927, APPENDIX II OCCUPANCY COSTS Electrity and Water 275, , Police Guard 334, , Rent, Rates and Taxes 156, , Generator Running Expenses 153, , Repairs and Maintenance 210, , TOTAL (PAGE 16) 1,131, , APPENDIX III ADMINISTRATIVE EXPENSES Motor Running Expenses 434, , Printing and Stationery 157, , Insurance 233, , Business Promotion 171, , Subscriptions & Periodicals 62, , SFC Expenses 53, , Transport and Travelling 543, , Specie Expenses 82, , Computerisation Expenses 333, , Directors Sitting Expenses 52, , Board Meeting Expenses 22, , Amenfiman Rural Bank Ltd. AGM

50 Schedule of Appendixes (Cont d) AGM Expenses 119, , Postage, Telephone & Telegraph 72, , Bank Charges 151, , Office Expenses 568, , Legal Expenses 18, , Directors Transportation 49, , Mobiliasation Expenses 345, , Motor Vehicle Repairs and Maintenance 309, , Cleaning & Sanitation 54, , Interest on Borrowing - 57, Bad Debts - 79, Advertising and Publicity 179, , TOTAL (PAGE 16) 4,017, ,105, Amenfiman Rural Bank Ltd. AGM 2016

51 Notes Amenfiman Rural Bank Ltd. AGM

52 Notes 52 Amenfiman Rural Bank Ltd. AGM 2016

53 Proxy Authorisation I/We...of......being a member.....hereby appoint...of...or failing him/her......of......as my/our proxy to vote on my/our behalf at the Annual General Meeting of Amenfiman Rural Bank Limited to be held on......at......and any adjustmment thereof. Signed... This...day of Please Cut Along This Line

54

55

56