YAPRA RURAL BANK LIMITED BOARD OF DIRECTORS AND OFFICIALS

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2 YAPRA RURAL BANK LIMITED BOARD OF DIRECTORS AND OFFICIALS BOARD OF DIRECTORS: Justice Abdulai Adamu Chairman ( ) Nana Baffour Gyekye Vice Chairman Mohammed Hardi Seidu Member Nasrulai Abdalah Member Mohammed Masaud Member Amankwa Kokro Member Robert Nachindi Co-opted Member Richmond Osei-Marfo Co-opted Member SECRETARY: Mohammed Hardi Seidu REGISTERED OFFICE: Head Office Prang AUDITORS: SOLICITORS: BANKERS: Opoku, Andoh & Co Chartered Accountants SDA 8, Community 5 P.O.Box Co1364 Tema Wiredu-Peprah, Oduro & Co. P.O.Box 1542 Sunyani Brong-Ahafo ARB Apex Bank Limited Agricultural Development Bank Ghana Commercial Bank 1

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4 YAPRA RURAL BANK LIMITED RESPONSIBILITIES OF THE DIRECTORS The Companies Code, 1963 (Act 179) and the Banking Act 2004 (Act 673) as amended by the Banking (Amendment Act of 2007 (Act 738) require the Directors to prepare financial statement which gives a true and fair view of the state of affairs of the Bank and of the Profit or Loss of the Bank for each financial year. In preparing these financial statements, the Directors have:- Selected suitable accounting policies and applied them consistently; Made judgments and estimate that are reasonable and prudent; Followed applicable accounting standards; and Prepared the financial statements on a going concern basis. The Directors are responsible for ensuring that proper accounting records are kept which disclose with reasonable accuracy the financial position of the Bank. They are also responsible for safeguarding the assets of the Bank and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The above statement which should be read in conjunction with the statement of the Auditors responsibilities set out on page 4 to 5 is made with a view to distinguishing for shareholders the respective responsibilities of the Directors and the Auditors in relation to these financial statements. 3

5 INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF YAPRA RURAL BANK LIMITED ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 ST DECEMBER, 2015 We have audited the accompanying financial statements of Yapra Rural Bank Limited set out on pages 6 to 19. These financial statements comprise the Balance Sheet as at 31 st December 2015 and the Profit and Loss Account and the Cash Flow statement for the year then ended and a summary of significant accounting policies and other explanatory notes. Directors Responsibilities for the Financial Statements The Directors are responsible for the preparation and fair presentation of these financial statements in accordance with Ghana National Accounting Standards and with the requirements of the Ghana Companies Code 1963 (Act 179) and the Banking Act, 2004 (Act 673) as amended by the Banking (Amendment) Act of 2007, (Act 738). This responsibility includes: designing, implementing and maintaining internal control systems relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error, selecting and applying appropriate accounting policies: and making estimates that are reasonable in the circumstances. Auditors Responsibility Our responsibility is to express an independent opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards required that we comply with ethical requirements and plan and perform our audit to obtain reasonable assurance that the financial statements are free from material misstatements. An audit involves performing procedures to obtain evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements whether due to fraud or error. In making those risk assessments, the auditor considers internal 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, but not for the purpose of expressing an opinion on the effectiveness of the bank s internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the Bank s transactions were within its powers, proper books of account have been kept and the accompanying financial statements, which are in agreement therewith, give a true and fair view of the state of affairs of the Bank at 31 st December 2015 and of the profit and cash flow for the year then ended in accordance with Ghana National Accounting Standards, and comply with the Ghana Companies Code, 1963 (Act 179) and the Banking Act, 2004 (Act 673) as amended by the Banking (Amendment) Act of 2007, (Act 738). 4

6 Report on the other Legal Requirements The Ghana Companies Code, 1963 (Act 179) requires that in carrying out our audit we consider and report on the following matters. We confirm that; i) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit; ii) In our opinion proper books of account have been kept by the Bank, so far as appears from our examination of those books and iii) The Bank s statement of financial position and comprehensive income are in agreement with the books of account. The Banking Act 2004 (Act 673), Section 78(2), requires that we state certain matters in our report. We hereby state that: a) We were able to obtain all the information and explanation required for the efficient performance of our duties as auditors: b) The Bank s transaction were within its powers: and c) The Bank complied with the provisions of the Banking Act, 2004 (Act 673) and the Banking (Amendment) Act 2007 (Act 738) OPOKU, ANDOH & CO. (ICAG/F/2015/053) PETER OPOKU (ICAG/P/1009) CHARTERED ACCOUNTANTS SDA 8, COMMUNITY 5 TEMA DATED 27/08/2016 5

7 YAPRA RURAL BANK LIMITED STATEMENT OF COMPREHENSIVE INCOME FORTHE YEAR ENDED 31 ST DECEMBER, 2015 NOTE GH GH Interest Income 2 2,582,595 2,341,892 Interest Expenses 3 (291,732) (223,057) NET INTEREST INCOME 2,290,863 2,118,835 Commission and Fees 4 349, ,994 Other Operating Income 5 91,079 53, TOTAL INCOME 2,731,092 2,508,363 Charge for Bad and Doubtful Debts 7 (68,992) (178,141) Operating Expenses 8 (2,355,860) (1,940,164) NET OPERATING PROFIT BEFORE TAX 306, ,058 Taxation 25 (31,259) (49,896) NET PROFIT BEFORE EXTRA-ORDINARY ITEMS 274, ,162 Extra-ordinary Items NET PROFIT AFTER EXTRA-ORDINARY ITEMS TRANSFERRED TO INCOME SURPLUS ACCOUNT 274, ,162 INCOME SURPLUS ACCOUNT Balance at 1 st January 574, ,430 Prior Year Adjustment (64,619) Re-stated Balance 510, ,252 Net Profit from Statement of Comprehensive Income 274, , , ,414 Transfer to Statutory Reserve (12.5% of GH 274,981) (34,373) (42,520) Transfer to Development & Other Funds (20,000) (30,000) Transfer to Stated Capital 0 (100,000) Staff Retirement Fund (50,000) (20,000) Refurbishment Fund (30,000) (40,000) Dividend Payable (66,100) Balance at 31 st December 584, ,894 = The notes on pages 9 to 19 and the signatures on page 19 form an integral part of these financial statements. Report of the Auditor appears on pages 4 and 5. 6

8 YAPRA RURAL BANK LIMITED BALANCE SHEET AS AT 31 ST DECEMBER, 2015 NOTE ASSETS GH GH Cash and Short Term Funds 10 3,373,538 3,079,507 Investments 11 5,350,000 4,100,000 Advances 12 4,001,028 3,831,283 Other Securities 63,766 63,766 Other Assets Accounts , ,035 Taxation 25 22, ,491,575 11,850,022 Capital Work In Progress 336,147 96,268 Property, Plant and Equipment , , TOTAL ASSETS 14,604,240 12,590,137 ==== LIABILITIES AND SHAREHOLDERS FUNDS Deposits and Current Accounts 15 11,791,755 10,142,098 Borrowings ,425 24,695 Other Creditors and Accruals , , TOTAL LIABILITIES 12,820,896 10,959, Stated Capital , ,238 Income Surplus 584, ,894 Statutory Reserve Fund , ,594 Staff Retirement Fund ,071 50,071 Development Fund , ,978 Refurbishment Fund , ,000 Capital Surplus 24,590 24, Shareholders Funds 1,783,344 1,630, TOTAL LIABILITIES AND SHAREHOLDERS FUNDS 14,604,240 12,590,137 ==== The notes on page 9 to19 and the signatures on page 19 form an integral part of this Balance Sheet. Report of the Auditors appears on pages 4 and 5. 7

9 YAPRA RURAL BANK LIMITED CASHFLOW STATEMENT FOR THE YEAR ENDED 31 ST DECEMBER 2015 RECONCILIATION OF NET CASHFLOWS NOTE FROM OPERATING ACTIVITIES GH GH Net Cash Inflow/Outflow from Operating Activities 23 1,812,727 1,151,317 INVESTING ACTIVITIES Purchase of Fixed Assets (279,660) (136,542) Investments (1,250,000) (500,000) FINANCING ACTIVITIES Proceeds from issue of shares 10,964 5, Net Change in Cash Position 294, ,276 ANALYSIS OF NET CHANGES IN CASH POSITION Balance at 1 st January 3,079,507 2,559,231 Net Change in Cash Position 294, , Cash and Bank Balances at 31 st December 24 3,373,538 3,079,507 == The notes on pages 9 to 19 and the signatures on page 19 form an integral part of these financial statements. Report of the Auditor appears on pages 4 and 5. 8

10 YAPRA RURAL BANK LIMITED NOTES COMPRISING SUMMARIES OF ACCOUNTING POLICIES AND OTHER EXPLANATORY NOTES FOR THE YEAR ENDED 31 ST DECEMBER ) ACCOUNTING POLICIES The significant accounting policies adopted by the Bank and which have been used in preparing these financial statements are stated below. a. Basis of Accounting These financial statements have been prepared under the historical cost convention. b. Interest Income The recognition of interest ceases when the payment of interest or principal is determined by the Bank to be in doubt. Interest is taken into income when the outstanding arrears of interest and principal are received. c. Fee Income Loan fees are credited to income over the life of the applicable loan. d. Investment Investments are included in the balance sheet at the face value less unearned discounts to maturity. Bills discounted are stated at amortised cost. The premium discount is amortised over the period to redemption and disclosed separately in interest income. e. Advances Advances are stated in the balance sheet at the amount of principal and interest outstanding less any provision for bad and doubtful debts computed in line with Bank of Ghana s guidelines. Advances are analysed between the total amount outstanding and provisions in a note to the financial statements. 9

11 f. Provision for bad and doubtful debts Provision for bad and doubtful debts are made, having regard to both specific and general risks. The specific element of the provisions relates to those loans that have been individually reviewed and specifically identified as bad or doubtful. The general element of the provision relates to those existing losses that although not yet specifically identified, are known from experience to be present at the year- end in the Bank s portfolio of loans and advances. In determining the level of the provisions required, management considered numerous factors including but not limited to domestic economic conditions and the composition of the loan portfolio. Provisions made during the year are charged to the Statement of Comprehensive Income. Loans are written off when they have been fully provided for and the probability of recovery is small. g. Fixed Assets Fixed Assets are stated at cost less depreciation. Depreciation is calculated to write off the cost of fixed assets on a straight-line basis over the estimated useful lives of the assets concerned. The principal rates used for this purpose are:- Building 5% Furniture and Fittings 20% Office Equipment 25% Motor Vehicle 25% Motor Bike 20% Computer 25% 10

12 ) INTEREST INCOME GH GH Investments 1,030, ,507 Advances 1,551,918 1,580, ,582,595 2,341,892 == 3) INTEREST EXPENSE Interest on Deposit Liabilities 254, ,051 Interest on Borrowings 36,905 18, , ,057 4) FEES AND COMMISSION Commitment Fees 226, ,084 Commissions 122, , , ,994 5) OTHER OPERATING INCOME Sundry Income 91,079 53,534 ====== ====== 6) PROVISION FOR BAD AND DOUBTFUL DEBTS Provision at the beginning of the year 427, ,037 Net Increase in Provision (Note 7) 109, , Balance at 31 st December , ,178 7) CHARGE TO OPERATING EXPENSES Bad Debt (Recovered)/Written off (40,657) 0 (Increase) in Provision for Bad & Doubtful Debt (Note 6) 109, , , ,141 11

13 8) OPERATING EXPENSES GH GH Salaries and related costs 673, ,925 Depreciation 146, ,045 Occupancy Cost 22,299 23,373 Audit Fees & VAT 11,750 10,300 Other Operating Expenses (Note 9) 1,501,698 1,161, ,355,860 1,940,164 === 9) OTHER OPERATING EXPENSES Other Staff Costs 88, ,971 Board Meeting Expenses 50,566 36,059 Directors Remuneration 17,182 9,563 Repairs and Maintenance 44,842 33,339 Susu & Taimako Expenses 115,981 43,466 Donations 24,023 11,754 Specie Movement 10,185 5,785 Tax Services & VAT 2,350 2,060 Insurance 44,330 20,156 Travelling and Transport 164,746 82,764 Printing and Stationery 79,470 56,154 Postage and Telephone 23,461 9,731 Subscriptions and Periodicals 24,793 28,121 Bungalow Expenses 3,692 1,758 Fuel Subsidies 0 50,862 Security Expenses 27,835 24,200 Clothing Allowance 35, Social Security and Fund 98,916 88,548 Entertainment 22,288 20,326 Electricity & Water 58,017 86,802 Provident Fund 44,759 40,383 Medical Expenses 7,423 1,535 Motor Vehicle Expenses 55, ,672 Legal Fees & Expenses 1,150 4,420 Staff Bonus 116,660 93,278 Advertising and Publicity 7,710 7,455 Staff Training 29,529 35,972 Office Expenses 42,176 29,419 A.G.M Expenses 9,076 18,953 Generator Running Expenses 97,885 0 Audit Expenses 3,237 1,550 Computerization Expenses 149,613 86, (Note 8) 1,501,698 1,161,521 == 12

14 ) CASH AND SHORT-TERM FUNDS GH GH Cash in Hand 1,385,609 1,132,978 ARB Apex Bank Ltd 1,409,437 1,395,919 5% ARB Apex Bank Placement 577, ,180 Balances with local banks 1,162 50, ,373,538 3,079,507 == 11) INVESTMENTS There are made up of Ghana Government Treasury Bills and are recorded as follows:- a. Nominal Value 5,350,000 4,100,000 == b. Apex Bank Association of Rural Banks 63,736 63, ,766 63,766 ====== ====== 12) ADVANCES Analysis by type of customer: Individuals 4,271,188 Corporate Bodies Staff and Directors 266, ,537,855 4,258,461 == Type of Advances Loan 4,175,584 3,845,910 Overdraft 362, , ,537,855 4,258,461 Less: Provision for bad and doubtful debts (Note 6) (536,827) (427,178) ,001,028 3,831,283 === 13

15 13) OTHER ASSET ACCOUNTS GH GH Sundry Debtors/Other Assets 482, ,149 Stocks of Stationery 92, ,459 Payments in Advance 103, ,695 Inter Branch 2, , , ,035 14) PROPERTY, PLANT & EQUIPMENT OFFICE OFFICE MOTOR OFFICE FURNITURE MOTOR a) COST BUILDING VEHICLE EQUIPMENT & FITTINGS BIKES COMPUTERS TOTAL GH GH GH GH GH GH GH Balance at 1 st Jan , , ,040 58,820 22, ,760 1,066,474 Additions 0 136, , , , Balance at 31 st Dec , , ,673 58,820 22, ,458 1,346,134 ======= ====== ====== = b) ACC. OFFICE MOTOR OFFICE FURNITURE MOTOR DEP. BUILDING VEHICLE EQUIPMENT & FITTINGS BIKES COMPUTERS TOTAL GH GH GH GH GH GH GH Balance at 1 st Jan , ,744 90,583 46,464 5,991 73, ,627 Charge to P&L 27,337 54,095 36,058 2, , , Balance at 31 st Dec , , ,641 48,713 6,951 99, ,616 ====== ======= ====== ====== ===== ====== ======= c) NET BOOK VALUE As at 31 s Dec, ,518 ======= As at 31 st Dec, ,847 ======= 15) DEPOSITS AND CURRENT ACCOUNT GH GH Savings Accounts 6,845,566 6,310,843 Current Accounts 1,575,047 1,506,459 Time Deposit 1,358, ,625 Susu 2,012,373 1,569, ,791,755 10,142,098 ==== 14

16 16) BORROWINGS GH GH Long Term (Office Building & Vehicle) 282,425 24, ,425 24,695 ======= ====== 17) OTHER CREDITORS AND ACCRUALS Sundry Creditors 220, ,641 Accrued Charges 154,757 12,360 Managed Funds-Rural Ent. Dev.Fund 34, ,399 Discount on Treasury Bills 229, ,973 Bills & Dividend Payable 107,568 53, , ,979 18) STATED CAPITAL Authorized: Number of Ordinary shares of no par value 1,000, Number GH Number GH Ordinary Shares: Balance brought forward 339, ,725 Issued during the year 10,964 5,501 Transfer from Stated Capital 0 100, , ,226 == = Preference Shares: Balance brought forward 125, , Issued during the year , , ====== == ====== == There is no share in treasury and no unpaid liability on any share, and there are no calls or installment unpaid. 15

17 ) STATUTORY RESERVES GH GH Balance at 1 st January 379, ,074 Prior Year Adjustment Restated Balance 380, ,074 Transfer from Income Surplus Account 34,373 42, Balance at 31 st December 414, , ) STAFF RETIREMENT FUND GH GH Balance at 1st January 50,071 49,691 Utilised 0 (19,620) Transfer from Income Surplus Account 50,000 20, Balance at 31st December 100,071 50,071 ====== ====== ) DEVELOPMENT FUND GH GH Balance at 1st January 141, ,138 Utilised (3,000) (21,160) Transfer from Income Surplus Account 20,000 30, Balance at 31st December 158, , ) REFURBISHMENT FUND GH GH Balance at 1st January 120,000 80,000 Utilised 0 0 Transfer from Income Surplus Account 30,000 40, Balance at 31st December 150, ,000 16

18 23) NOTES TO THE CASHFLOW STATEMENT GH GH Net Profit before Tax 306, ,998 Depreciation 146, ,045 Impairment Charges 68, ,141 CASHFLOW FROM OPERATING ACTIVITIES BEFORE CHANGES IN OPERATING ASSETS & LIABILITIES 522, ,184 (Increase) / Decrease in Loans and Advances (169,745) 13,910 ( Increase) / Decrease in Other Assets 94,268 (320,852) Increase in Deposit and Current Account 1,649,657 1,130,642 Increase /(Decrease) in Creditors & Accruals (112,363) (5,050) Corporate Tax Paid (53,304) (48,000) Adjustment (375,737) (218,087) Increase/(Decrease) in Borrowings 257,730 (108,430) NET CASH INFLOW FROM OPERATING ACTIVITIES 1,812,727 1,151,317 == 24) ANALYSIS OF THE BALANCE OF CASH AND CASH EQUIVALENT AS SHOWN IN THE BALANCE SHEET. GH GH Cash at Banks 1,987,929 1,946,529 Cash in Hand 1,385,609 1,132, ,373,538 3,079,507 ==== 25) TAXATION Year of Assessment Balance as at January Tax Adjustment Charge for the Year Amount Paid Balance at December GH GH GH GH GH ,151 21,098 42,673 (91,249) (2,327) 2014 (2,327) 0 49,896 (48,000) (431) 2015 (431) 0 31,259 (53,304) (22,476) 17

19 26) TAX COMPUTATION 2015 GH Net Profit before Tax 306,240 Add: Depreciation 146,989 Impairment Charges 68,992 VAT & NHIL on Audit & Tax Fees 2,100 Donations 24, Adjusted Profit 548,344 Less: Capital Allowance (Schedule Attached) 157, Chargeable Income 390,738 ======= Tax payable (8% of GH 390,738) 31,259 ====== YAPRA RURAL BANK LIMITED CAPITAL ALLOWANCE COMPUTATION 2015 YEAR OF ASSESSMENT CLASS OF ASSETS POOL POOL POOL CLASS CLASS CLASS CLASS (A) 5 (B) 5 (C) 5 (D) 40% 30% 20% 10% 10% 10% 10% Data Automobiles Furniture Handling Plant & & Office Office Office Office Equipment Equipment Fittings Building Building Building Building GH GH GH GH GH GH GH Balance at 1 st Jan 25,019 70,118 67, ,943 83, ,874 Additions 12, , , ,080 67, ,943 83, ,874 Dep.Allowance 15, ,124 13, ,194 8,397 17, W. D. V at 31 st Dec 22, ,956 54, ,749 75, ,687 ====== ====== ====== ==== ====== ====== ====== 18

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