Download pdf - uniCredit 2015 Annual Report - uniCredit Ghana Limited Annual Report-3... · uniCredit 2015 Annual Report | 01 About Us uniCredit Ghana Limited is one of the leading Savings & Loans

uniCredit Ghana Limited

Annual ReportFor The Year Ended 31 December 2015

Page

1

2

3

4

6 - 7

8

9 - 11

12

13

14 – 15

16

17

18

19

21 – 56

Contents Corporate Information

Misson, Vision & Values

Corporate Information

Board of Directors

Chairman’s Statement Executive Committee

Chief Executive’s Statement Directors’ Report Statement of Directors’ Responsibilities Independent Auditor’s Report Statement of Pro�t or Loss and Other Comprehensive Income Statement of Financial Position Statement of Changes in Equity Statement of Cash Flow Notes to the Financial Statements

Contents

uniCredit 2015 Annual Report | 01

About UsuniCredit Ghana Limited is one of the leading Savings & Loans Companies in Ghana, licensed by the Bank of Ghana (BoG) under the Non-Bank Financial Institutions Act 2008 (Act 774). The company is headquartered at No. 3 North Ridge Lane, Accra within the capital’s cosmopolitan arena. Since 2007, the footprints of uniCredit on the �nancial and banking landscape of Ghana have been progressively distinct, currently with eighteen (18) fully-networked branches in four (4) regions of Ghana.

uniCredit envisions becoming the most e�cient and e�ective Savings and Loans Company operating in the SME Banking market. In furtherance of this, we seek to provide our esteemed customers with convenient, tailored and reliable banking products and services through our state-of-the-art IT infrastructure and dedicated team of professionals deployed across all our branches. We o�er a range of personal, business and institutional �nancial solutions that are designed to deliver optimum value to our customers.

uniCredit is also committed to distinguishing itself through excellence, as is evidenced by its listing on the 2014 Ghana Club 100 as a member of the prestigious group of the current top 100 companies in Ghana. This recognition of the institution’s performance validates its focus on ensuring both productivity and operational vigilance to secure our customers’ interests.

With an ongoing branch expansion drive and the recent launch of its electronic banking suite, uniCredit gives you several reasons to own any of our deposit and credit products. We keep to our brand promise in going the extra mile to delight you, our esteemed customer, through a responsive and proactive approach to handling your business needs. Other services provided to our clients include:

Our sta� are ably-equipped to address your banking concerns and guide you towards the realisation of your personal and business �nancial goals. At uniCredit, we are ready to grow with you.

uniCredit…Your Caring Partner

SME & Personal BankingBusiness Advisory ServicesBusiness PlanningFinancial PlanningCash Flow Forecasts


02 | uniCredit 2015 Annual Report

MISSIONTo develop Financial Products and Services and make them easily accessibleto our target market.

VISIONTo be the most e�cient and e�ectiveSavings & Loans Company operatingin the SME Banking Market.

CORE VALUES Caring Flexibility E�ciency Integrity Teamwork Accountability Professionalism

Misson, Vision & Core Values


Mr. Frank Oppong-Yeboah ChairmanMr. Samuel Sakyi-Hyde Chief Executive O�cerMrs. Akosua Du�uor Executive DirectorDr. Kwabena Du�uor II Non-Executive DirectorMrs. Boatemaa D. Barfour-Awuah Non-Executive DirectorMr. Simeon Tawiah Non-Executive DirectorMr. Benjamin Ofori Non-Executive DirectorMr. Anthony Marshall Arpoh Esq. Secretary

Mr. Samuel Sakyi- Hyde Chief Executive O�cerMrs Akosua Du�uor Executive DirectorMr. P. V. Yeboah-Asiamah General ManagerMr. Daniel Osei Head, Finance & AdministrationMr. Seth Ofori- Larbi Head, Internal Control

Deloitte and Touche Chartered Accountants 4 Liberation Road P. O. Box GP 453 Accra

Anthony Marshall Arpoh P. O. Box GP 18729, Accra. uniCredit Ghana Limited No. 3 North Ridge Lane North Ridge P. O. Box GP 18729, Accra. uniBank (Ghana) Limited

Directors:

Executive Committee:

Auditors:

Solicitor:

Registered O�ce:

Bankers:


Board of Directors

Mr. Simeon TawiahNon-Executive Director

Mrs. BoatemaaD. Barfour-AwuahNon-Executive Director

Dr. Kwabena Du�uor IINon-Executive Director

Mr. Benjamin Kwame OforiNon-Executive Director

Mr. AnthonyMarshall Arpoh Esq.Secretary

Mrs. Akosua Du�uorExecutive Director

Mr. Samuel Sakyi-HydeChief Executive O�cer

Mr. Frank Oppong-YeboahChairman


Chairman’s Statement

Distinguished Shareholders,on behalf of the Board of Directors and Management of uniCredit Ghana Limited, it is my pleasure to welcome you to the 3rd Annual General Meeting of your Company; and present to you the Annual Report and Financial Statements for the �nancial year ended 31st December, 2015. The Company’s �nancial performance remained stable within the context of a competitive and challenging environment.

Operating EnvironmentThe Ghanaian economy in 2015 remained resilient despite the severe energy crisis, domestic and external debt burdens, and macroeconomic volatility. During the year, the government embarked on a stabilisation programme with the International Monetary Fund to address the increasingly unsustainable �scal and current account imbalances. This sought to restrain and prioritise public expenditure, increase tax revenue and strengthen the e�ectiveness of the central bank’s monetary policy. The issuance of a $1 billion Eurobond also helped to support the currency, cover the budget and rollover short-term debt.

Over the medium term, the economy is projected to recover with a real GDP growth of 5.4% in 2016 and 5.8% in 2017 anchored on higher oil and gas production, increased private sector and public infrastructure investments, as well as an improved macroeconomic framework. Ghana continues to enjoy a relatively favourable political risk pro�le, and the upcoming 2016 election is expected to be peaceful. It is also the expectation that

the government will ensure strong �scal discipline in order to remain within budget de�cit targets during this period. The macroeconomic highlights for 2015 indicated GDP growth at 4.1%. Real GDP is projected at 5.4% in 2016 in anticipation of increasing oil production and improvement in the electricity generation shortfall. Various strategies have been outlined in the 2016 budget to increase the revenue generation capacity of the government and reduce the country’s rising debt burden. In that regard, a new Income Tax Act 2015 (Act 896) came into force on 1st January 2016. The Act seeks to among others simplify the income tax regime, improve tax compliance and impose other new taxes. It also seeks to change the tax rate of some of the existing taxes in the country, and it is expected to yield additional revenue equivalent to 0.3% of GDP.

2015 Operating ResultsYour Company, uniCredit Ghana Limited, recorded a Pro�t before Tax of GH¢9,468,660.00 and Pro�t after Tax of GH¢8,240,901.00. Net Operating Income increased by 43% and Current Operating Expenses grew by 33%. Shareholders’ Funds increased substantially from GH¢30,321,844.00 to GH¢70,933,745.00, representing a signi�cant progression of 134%.

DividendThe Board does not intend to recommend any dividend to shareholders. In furtherance of continuously delivering value to shareholders, the Board of Directors recommends that the income surplus balance be ploughed back into company operations.

Mr. Frank Oppong-YeboahChairman


Changes in Capital StructureIn the year under review, shareholders injected additional GH¢32.37 million to increase our stated capital from GH¢17.49 million at the beginning of the year to GH¢49.86 million at the end of the year. The Board, Management and Sta� are most grateful to you, our dear shareholders, for your �nancial contributions that propelled the Company’s �nancial performance and expansion to the success attained.

Corporate GovernanceOur Company is committed to ensuring e�ective corporate governance and sound risk management practices which are of fundamental importance in the industry. The adherence to good corporate governance principles continues to be the mainstay of our operations, thereby helping us to maintain consistency and rigour in our decision-making processes. The Companies Act, 1963 (Act 179); Non-Bank Financial Institutions Act, 2008, (Act 774); the Anti-Money Laundering Act, 2008 (Act 749); and the Anti-Money Laundering Regulations, 2011(LI 1987) provide us with the regulatory framework for ensuring e�ective corporate governance and an e�cient compliance regime.

Outlook for the Year 2016The year 2016 is an election year and as always with Ghana's political stability and deepening democracy, I am sure that the

elections will be held peacefully. uniCredit Ghana Limited is highly con�dent in the future of Ghana, given the strong economic potential of the country and its sustained peaceful governance.

For uniCredit Ghana Limited, the year 2016 will be a year of transformation for new systems and processes to be put in place with the aim of increasing our market share and achieving sustained organic growth. We are very optimistic about the future of our Company.

AcknowledgementsOn behalf of the Board of Directors, we wish to thank each and every Shareholder; our cherished Customers; and other Stakeholders for the �rm con�dence and support demonstrated over the years. I would also like to express my sincere gratitude to our employees at all levels for their contribution to the growth and pro�ts we made in 2015.

We are con�dent that TOGETHER we will continue to build uniCredit Ghana Limited into a more pro�table business and record a considerable increase in its market share by our next Annual General Meeting.

Thank you for your attention.

Frank Oppong-YeboahChairman

For the year ended 31 December 2015

Chairman’s Statement


Executive Committee


P.V. Yeboah-AsiamahGeneral Manager

Mrs. Akosua Du�uorExecutive Director

Seth Ofori- LarbiHead, Internal Control

Daniel OseiHead, Finance and Admin.

Mr. Samuel Sakyi- HydeChief Executive O�cer

IntroductionI am delighted to present to you, our dear shareholders, the performance of your Company for the �nancial year ended 31st December 2015. The operating economic environment in the year 2015 was challenging, but in spite of these challenges I am pleased to inform you that your Company rea�rmed the strength of our business model to deliver yet another sterling performance.

A number of challenges characterised the operating environment in 2015, and these included; the severe power crisis which persisted for the most part of the year, with measures put in place by the government to ease the burden materialising a few months to the end of the year. The depreciation of the Cedi was steep during the �rst half of 2015 but recovered to close the year at 15.7% as compared to 31.3% in 2014. The falling prices of commodities including oil, cocoa and gold on the international markets also adversely impacted the Ghanaian economy.

In addition, the Central Bank merged the policy rate with the reverse repo rate during the year and also increased the policy rate to 26% from 21% at the end of 2014. Global economic activity remained subdued during the review period driven mainly by slower growth prospects in China and other emerging market economies.

Financial PerformanceThe New Dawn Strategy which was introduced in 2014 was adhered to in the year 2015. As a result, your Company delivered

a strong �nancial performance consistent with our performance over the years in spite of intense competition and a tough operating environment. This is evidenced by a pro�t before tax of GH¢9.46 million compared to GH¢4.26million in the previous year. Most of our business lines recorded growth, which is re�ective of our deliberate e�orts to create sustainable value and a focused implementation of our New Dawn Strategy.

The total asset base of the Company grew by 61.24% during the year from GH¢203.6 million in 2014 to GH¢328.4 million in 2015. Customer deposits increased by 49.58%, due to gains from our expanded branch network and deliberate deposit mobilisation e�orts during the period. We maintained a continuous focus on enhancing the quality of relationship management, credit monitoring and recoveries to e�ectively manage the quality of our loan book. That notwithstanding, speci�c and challenging advances were adequately provided for and recovery measures put in place. Our capital adequacy ratio remained relatively high at 30.75% arising out of our Tier I funding and increased earnings in 2015. We will leverage our strong capital position to sustain planned future development of our business.

Operational PerformanceTo improve the Company’s accessibility, we have broadened the Company’s delivery channels and diversi�ed its market o�ering, as evidenced by the expanded branch network to include Dr. Mensah- Kumasi, Ridge, Kasoa, Kokomlemle,Kantamanto Central and Agbogbloshie branches to enhance our retail franchise. In


Chief Executive’s StatementMr. Samuel Sakyi-HydeChief Executive O�cer


Chief Executive’s Statement

order to reduce customer tra�c and activity in our banking halls and to further improve upon our customer services, we have also initiated the process of introducing Automated Teller Machine (ATM) products and services. As at the end of the year 2015, �ve (5) ATM machines had been procured for installation at vantage business o�ces. New Products and Services

TOTAL ASSETS TOTAL DEPOSITS

300.000

250.000

200.000

150.000

100.000

50.000

02011 2012 2013 2014 2015

350.000

300.000

250.000

200.000

150.000

100.000

50.000

2011 2012 2013 2014 20150

Total Assets

Total Deposits

Loans & Advances

Investments

Shareholders Funds

Pro�t before Tax

Pro�t after Tax

Return on Equity

78,12064,46937,47218,804

7,1254,1492,623

37.0%

104,73089,93557,62725,045

9,3022,5611,781

20.0%

156,835123,201

82,10339,86818,406 2,998 2,294

12.5%

203,672162,630

86,734.00 73,488.00 30,321.00

4,262.00 3,216.00

10.6%

328,406243,261

101,597.00 139,857.00

70,933.00 9,468.00 8,240.00

11.6%

2011GH¢ '000

2012GH¢ '000

2013GH¢ '000

2014GH¢ '000

2015GH¢ '000

SUMMARY OF COMPANY'S PERFORMANCE OVER THE PAST FIVE YEARS


LOANS & ADVANCES SHAREHOLDERS FUND

120.000

100.000

80.000

60.000

40.000

20.000

2011 2012 2013 2014 20150

80.000

70.000

60.000

50.000

40.000

10.000

20.000

30.000

02011 2012 2013 2014 2015

PROFIT BEFORE TAX PROFIT AFTER TAX

2011 2012 2013 2014 2015

10.000

6,0007,0008,0009,000

5,000

4,1494,000

1,0002,0003,000

0

2,561 2,998

4,262

9,468

2011 2012 2013 2014 2015

6,000

7,000

8,000

9,000

5,000

4,000

1,000

2,000

3,000

0

1,7812,294

3,216

8,240

2,623

The year 2015 saw the development of new products and services as well as revamping some existing products in line with customer needs and competitive insights. The “EazzLife” consumer asset �nance product was launched to enable our current and potential customers acquire an array of vital home and electronic appliances such as LED TVs, washing machines, etc. and make �exible payments over a period of twelve (12) months. Another product developed was the “Smart Personal Loan”, a same-day loan for salaried workers. This product is available to account and non-account holders of uniCredit.

Head O�ce In the spirit of breaking new grounds with our New Dawn Strategy, I am very pleased to inform you that our corporate head o�ce has been relocated to a plush, ultra-modern facility at North Ridge, Accra. This relocation has enhanced the visibility of the uniCredit brand and made it synonymous with vibrancy and distinction.

ConclusionOn behalf of the Board, I would like to appreciate our customers for their continued patronage of our products and services and our shareholders for their unwavering support to the Company’s Board, Management team and the business as a whole. Finally, I would also like to thank our talented employees for their continued commitment and dedication to the Company. Ladies and Gentlemen, I am con�dent that with your continued support, 2016 will be a tremendously successful year.

Thank you and God bless us all.

Samuel Sakyi-HydeChief Executive O�cer


Chief Executive’s Statement


The Directors have pleasure in submitting to the shareholders, the annual reports together with the �nancial statements of the company for the year ended 31 December, 2015 in accordance with the Companies Act 1963, Section 132 (Act 673) as amended by Banking (Amendment) Act, 2007 (Act 738), and the regulations governing the Non-Bank Financial Institution Act 2008, Act (774)

DividendThe directors do not recommend the payment of dividend for the year ended 31 December 2015 (2014: GH¢ Nil).

Principal ActivitiesThe principal activities of the company was in accordance with its regulations and there was no change in the principal activities of the company during the year.

AuditorsIn accordance with the Companies Act 1963, Act 179 (1963), Section 134(5), Messrs. Deloitte & Touche, Chartered Accountants will continue as auditors of the company.

Events After the Reporting PeriodThe Directors con�rm that no matters have arisen since 31 December 2015, which a�ect the �nancial statements of the company for the year ended on that date.

Total income

Pro�t before tax

From which is deducted;

Provision for estimated income tax expense of

Provision for national stabilisation levy of

Leaving a pro�t after tax of

Which is to be added to the surplus brought forward of

Leaving a balance of

From which is deducted transfer to statutory reserve fund

And a transfer to regulatory credit risk reserve of

Resulting in a balance to be carried forward on the

Income surplus account at December 31 of

76,870,619

9,468,660

(754,326)

(473,433)

8,240,901

3,774,985

12,015,886

(4,120,451)

(1,427,402)

6,468,034

58,701,377

4,262,530

(833,091)

(213,127)

3,216,312

2,173,578

5,389,890

(1,608,156)

(6,749)

3,774,985

Result

Chairman

Date: 21 / 04/ 2016

Director

Date: 21 / 04/ 2016

2015 GH¢ 2014

GH¢

2.

1.

3.

4.

5.


Directors’ Report



Statement ofDirectors’ Responsibilities

The directors are responsible for preparing �nancial statements for each �nancial year which give a true and fair view of the state of a�airs of the company at the end of the �nancial year and of the pro�t and loss of the company for that year. In preparing those �nancial statements the directors are required to:

The directors are responsible for ensuring that the company keeps accounting records which disclose with reasonable accuracy, at any time , the �nancial position of the company and which enables them to ensure that the �nancial statements comply with the Companies Code, 1963 (Act 179). They are also responsible for taking such steps as are reasonably open to them to safeguard the assets of the company and to 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 6 is made with a view to distinguishing for shareholders the respective responsibilities of the directors and the auditors, in relation to the �nancial statements.

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, subject to any material departures disclosed and explained in the �nancial statements; and

Prepare the �nancial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.


Independent Auditors’ Report tothe Members of uniCredit Ghana Limited

Report on the Financial StatementsWe have audited the accompanying �nancial statements of uniCredit Ghana Limited on pages 11 to 52 which comprise the statement of �nancial position as at 31 December, 2015, income statement, statement of changes in equity and statement of cash �ows for the year then ended, together with the summary of signi�cant accounting policies and other explanatory notes, and have obtained all information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of our audit.

Directors’ Responsibility for the Financial StatementsThe Directors are responsible for the preparation and fair presentation of these �nancial statements in accordance with International Financial Reporting Standards and the Companies Code, 1963 (Act 179). This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of �nancial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these �nancial 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 as to whether the �nancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the �nancial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the �nancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the �nancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the e�ectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the �nancial statements.

We believe that the audit evidence we have obtained is su�cient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the company has kept proper accounting records and the �nancial statements are in agreement with the records in all material respects and given in the prescribed manner, information required by the Companies Act, 1963 (Act 179), and the Banking Act, 2004 (Act 673), as amended by the Banking (Amendment) Act, 2007 (Act 738). The �nancial statements is fairly presented in all material respect of the �nancial position of the company as at 31 December 2015, and of its �nancial performance, cash �ows for the year then ended and are drawn up in accordance with the International Financial Reporting Standards (IFRS).


Independent Auditors’ Report tothe Members of uniCredit Ghana Limited

Report on Other Legal and Regulatory Requirements

The Companies Code, 1963 (Act 179) requires that in carrying out our audit we consider and report on the following matters. We con�rm that:

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;

In our opinion proper books of account have been kept by the company, so far as appears from our examination of those books; and

The balance sheet (statement of �nancial position), the pro�t and loss (statement of pro�t or loss and other comprehensive income) of the company are in agreement with the books of account.

i.

ii.

iii.

the accounts give a true and fair view of the state of a�airs of the �nancial institution;

we were able to obtain all the information and explanation required for the e�cient performance of our duties; and

the �nancial institution’s transactions were within its authorised powers.

Deloitte & ToucheLicence No. ICA/F/2015/129Chartered AccountantsAccra, GhanaFelix Nana SackeyPractising Certi�cate: Licence No. ICAG/P/1131

29th April, 2016

i.

ii.

iii.

The Non-Bank Financial Institutions Act, 2008 Act 774), Section 23 and the Banking Act, 2004 (Act 673), Section 78 (2) requires that we state certain matters in our report. We hereby state that:


2015 2014Notes GH¢

GH¢

Interest income 5 76,870,619 58,197,981

Interest expense 6 (32,421,243 ) (23,969,888)

Net interest income 44,449,376 34,228,093

Fees and commission income 7 5,101,642 502,566

Other operation income 8 57,157 830

Operating income 49,608,175 34,731,489

Operating expenses 9 (39,528,544) (29,601,215)

Operating Pro�t before charge for creditimpairment loss 10,079,631 5,130,274

Credit impairment loss 11 (610,971) (867,744)

Pro�t before taxation 9,468,660 4,262,530

Taxation 12 a (754,326) (833,091)

National �scal stabilisation levy 12d (473,433) (213,127)

Pro�t for the year 8,240,901 3,216,312

Other comprehensive income -

-

Total comprehensive income 8,240,901 3,216,312

The accompanying notes form an integral part of these �nancial statements.

Statement of Pro�t or Lossand Other Comprehensive IncomeFor the year ended 31 December 2015


Cash & Bank balances

Held-to maturity �nancial assets

Loans & advances to customers

Other assets

Property, plant and Equipment

Intangible assets

Current tax asset

Total assets

Liabilities

Customer deposits

Other liabilities

Current tax liability

National �scal stabilisation levy

Deferred tax liability

Total liabilities

Stated Capital

Capital Surplus

Statutory Reserve Funds

Regulatory Credit Risk Reserve

Income Surplus

Total shareholders' funds

Total liabilities and shareholders' funds

13

14

15

16

17

18

12c

19

20

12c

12d

12e

21

22

23

24

25

25,300,195

139,857,355

101,597,730

35,302,818

24,851,581

1,232,105

264,333

328,406,117

243,261,892

13,560,998

-

282,459

367,024

257,472,372

49,861,981

5,309,447

6,985,067

2,309,217

6,468,034

70,933,745

328,406,117

7,906,362

73,488,390

86,734,842

21,426,995

14,114,750

986

-

203,672,325

162,630,365

9,623,056

12,853

109,755

974,452

173,350,481

17,490,981

5,309,447

2,864,616

881,815

3,774,985

30,321,844

203,672,325

Chairman

Date: 21 / 04/ 2016

Director

Date: 21 / 04/ 2016

The accompanying notes form an integral part of these �nancial statements.

2015 GH¢

2014 GH¢NotesAsset


Statement of Financial Position


Bala

nce

at J

anua

ry 1

Reta

ined

Pro

�t fo

r the

yea

r

Tran

sact

ion

with

Ow

ners

Add

ition

al C

apita

l Int

rodu

ced

Tran

sfer

s w

ithin

Equ

ityTr

ansf

er to

Sta

tuto

ry R

eser

ve F

und

Tran

sfer

to /(

from

) Reg

ulat

ory

cred

it ris

k re

serv

eBa

lanc

e at

Dec

embe

r 31

17,4

90,9

81-

32,3

71,0

00

-

-49

,861

,981

5,30

9,44

7 - - -

-5,

309,

447

2,86

4,61

6 - -

4,12

0,45

1

-6,

985,

067

881,

815 - - -

1,42

7,40

22,

309,

217

3,77

4,98

58,

240,

901 -

(4,1

20,4

51)

(1,4

27,4

02)

6,46

8,03

4

30,3

21,8

448,

240,

901

32,3

71,0

00

-

-70

,933

,745

Stat

edCa

pita

lG

H¢

2015

Capi

tal

Surp

lus

GH

¢

Stat

utor

y Re

serv

esG

H¢

Cred

it R

isk

Rese

rve

GH

¢

Inco

me

Surp

lus

GH

¢To

tal

GH

¢

Bala

nce

as a

t 1 Ja

nuar

y Pr

o�t f

or th

e ye

arTr

ansa

ctio

ns w

ith o

wne

rsAd

ditio

nal C

apita

l Int

rodu

ced

Tran

sfer

s w

ithin

equ

ityTr

ansf

er to

Sta

tuto

ry R

eser

ve F

und

Tran

sfer

to/(

from

) Reg

ulat

ory

cred

it ris

k re

serv

eBa

lanc

e as

at 3

1 D

ecem

ber

8,79

0,98

1 -

8,70

0,00

0

-

17,4

90,9

81

5,30

9,44

7 - -

-

5,30

9,44

7

1,25

6,46

0 - -

1,60

8,15

6

-2,

864,

616

875,

066 - -

6,

749

881,

815

2,17

3,57

83,

216,

312 -

(1,6

08,1

56)

(

6,74

9)3,

774,

985

18,4

05,5

323,

216,

312

8,70

0,00

0 -

-

30,3

21,8

44

Stat

edCa

pita

lG

H¢

2014

Capi

tal

Surp

lus

GH

¢

Stat

utor

y Re

serv

esG

H¢

Cred

it R

isk

Rese

rve

GH

¢

Inco

me

Surp

lus

GH

¢To

tal

GH

¢

For t

he y

ear e

nded

31

Dec

embe

r 201

5

Stat

emen

t of C

hang

es in

Equ

ity

uniC

redi

t 201

5 A

nnua

l Rep

ort |

18

Pro�t before tax

Adjustment for:

Depreciation and amortisation

Charge for Credit Impairment

Interest in Suspense

Pro�t on Disposal of Fixed Assets

Operating Pro�t Before Working Capital Changes

Changes in held-to-maturity �nancial assets

Change in advances

Change in other assets

Change in other investments

Change in Customer Deposits

Change in creditors and accruals

Cash from operating activities

Tax Paid

Net Cash from operating activities

Cash �ows from investing activities

Purchase of Property, Plant & Equipment

Purchase of intangible assets

Proceeds from sale of Property & Equipment

Net Cash used in Investing Activities

Cash �ows from �nancing activities

Changes in borrowings

Increase Stated Capital

Net Cash from Financing Activities

Net Increase in cash and cash equivalents

Cash & cash equivalents at beginning of year

Cash & cash equivalents at end of period

Cash and cash equivalent

Cash in hand

Bank balance

9,468,660

1,608,086

610,971

7,299,843

(57,157)

18,930,403

(66,368,965)

(22,773,702)

(13,875,823)

-

80,631,527

3,937,942

481,382

(1,939,669)

(1,458,287)

(12,496,954)

(1,407,682)

385,756

(13,518,880)

-

32,371,000

32,371,000

17,393,833

7,906,362

25,300,195

8,594,621

16,705,574

25,300,195

4,262,530

2,408,827

867,744

(54,438)

(830)

7,483,833

(33,620,174)

(5,444,730)

(7,519,044)

2,468,495

39,429,630

626,769

3,424,779

(1,181,966)

2,242,813

(3,780,777)

-

1,606

(3,779,171)

(5,000,000)

8,700,000

3,700,000

2,163,642

5,742,720

7,906,362

4,823,262

3,083,100

7,906,362

2015 GH¢

2014 GH¢Cash �ows from operating activities

Statement of Cash FlowsFor the year ended 31 December 2015


Reporting EntityuniCredit Ghana Limited was incorporated as a limited liability company and domiciled in Ghana under the Company’s Act of 1963 (Act 179) in 1995. It was granted a license to operate as a �nancial institution in 1984 in accordance with the Banking Law of 1989 (PNDC Law 225).

uniCredit Ghana Limited is a non-bank �nancial institution which has been in operation since 1995. The Institution was formerly called Kantamanto Savings and Loans Co. Ltd, but had a change of name in June 2007. The ownership of the Institution changed in April 2005. The Institution is headquartered at No. 3 North Ridge Lane, North Ridge,Accra.

The primary focus of uniCredit is to provide �nancial services that are speci�cally tailored to the needs of personal customers and micro, small and medium scale enterprises.

Summary of Signi�cant Accounting PoliciesThe signi�cant accounting policies adopted by uniCredit Ghana Limited under the International Financial Reporting Standards (IFRSs) are set out below:

Statement of ComplianceThe �nancial statements of the Institution have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

Basis of PreparationThe �nancial statements have been prepared on a historical cost basis, except for the following material items in the statement of �nancial position:

Functional and Presentation CurrencyThese �nancial statements are presented in Ghana cedi, which is the Institution’s functional currency. Except as otherwise indicated, �nancial information presented in Ghana cedi has been rounded to the nearest one Ghana cedi.

Preparation of the Financial StatementsThe preparation of �nancial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company’s accounting policies. Changes in assumptions may have a signi�cant impact on the �nancial statements in the period the assumptions changed. Management believes that the underlying assumptions are appropriate. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are signi�cant to the �nancial statements are disclosed in Note 4.

Income and Statement of Cash FlowsThe Company has elected to present a single statement of pro�t or loss and other comprehensive income and presents its expenses by function of expense method.

The Company reports cash �ows from operating activities using the indirect method. Interest received is presented within investing cash �ows; interest paid is presented within operating cash �ows.

assets and liabilities held for trading are measured at fair value;

�nancial instruments designated at fair value through pro�t or loss are measured at fair value;

investments in equity instruments are measured at fair value;

other �nancial assets not held in a business model whose objective is to hold assets to collect contractual cash �ows or whose contractual terms do not give rise solely to payments of principal and interest are measured at fair value; and

available-for-sale �nancial assets are measured at fair value.

1.

2.

2.1

2.2



Notes to the Financial Statement

Revenue RecognitionRevenue is recognised to the extent that it is probable that the economic bene�ts will �ow to the Institution and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually de�ned terms of payment and excluding taxes or duty. The Institution assesses its revenue arrangements against speci�c criteria in order to determine if it is acting as principal or agent. The Institution has concluded that it is acting as a principal in all of its revenue arrangements. The following speci�c recognition criteria must also be met before revenue is recognised:

Our revenues are primarily derived from the following sources: (1) interest income on loans issued to clients; (2) commission and fees on providing �nancial advisory services: and (3) other revenues which are ancillary to our operations. Generally, revenues are recognised when the services have been rendered. The following is a description of the composition of our revenues: InterestInterest income and expense are recognised in pro�t or loss using the e�ective interest method. The e�ective interest rate is the rate that exactly discounts the estimated future cash payments and receipts through the expected life of the �nancial asset or liability (or, where appropriate, a shorter period) to the carrying amount of the �nancial asset or liability. When calculating the e�ective interest rate, the Institution estimates future cash �ows considering all contractual terms of the �nancial instrument, but not future credit losses.

The calculation of the e�ective interest rate includes all transaction costs and fees and points paid or received that are an integral part of the e�ective interest rate. Transaction costs include incremental costs that are directly attributable to the acquisition or issue of a �nancial asset or liability.Interest income and expense presented in the statement of comprehensive income include:

Interest income and expense on all trading assets and liabilities are considered to be incidental to the Group’s trading operations and are presented together with all other changes in the fair value of trading assets and liabilities in net trading income.

Commission and Fees Fees and commission income and expense that are integral to the e�ective interest rate on a �nancial asset or liability are included in the measurement of the e�ective interest rate. Other fees and commission income, including account servicing fees, investment management fees, sales commission, placement fees and syndication fees, are recognised as the related services are performed. When a loan commitment is not expected to result in the draw-down of a loan, the related loan commitment fees are recognised on a straight-line basis over the commitment period. Other fees and commission expense relate mainly to transaction and service fees, which are expensed as the services are received.

Net Trading Income Net trading income comprises gains less losses related to trading assets and liabilities, and includes all realised and unrealised fair value changes, interest, dividends and foreign exchange di�erences.

2.3

interest on �nancial assets and �nancial liabilities measured at amortised cost calculated on an e�ective interest basis;

the e�ective portion of fair value changes in qualifying hedging derivatives designated in cash �ow hedges of variability in interest cash �ows, in the same period that the hedged cash �ows a�ect interest income/expense;

the ine�ective portion of fair value changes in qualifying hedging derivatives designated in cash �ow hedges of interest rate risk; and

fair value changes in qualifying derivatives, including hedge ine�ectiveness, and related



The principal accounting policies are set out below:


Net Income from Other Financial Instruments at Fair Value through Pro�t or LossNet income from other �nancial instruments at fair value through pro�t or loss relates to non-trading derivatives held for risk management purposes that do not form part of qualifying hedge relationships, �nancial assets mandatorily measured at fair value through pro�t or loss other than those held for trading, and �nancial assets and liabilities designated at fair value through pro�t or loss. It includes all realised and unrealised fair value changes, interest, dividends and foreign exchange di�erences.

DividendsRevenue is recognised when the Institution’s right to receive the payment is established.

Taxes

Current Income TaxCurrent income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount those that are enacted or substantively enacted, at the reporting date in the countries where the Institution operates and generates taxable income.

Current income tax relating to items recognised directly in equity is recognised in equity and not in the statement of pro�t or loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Deferred TaxDeferred tax is provided using the liability method on temporary di�erences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for �nancial reporting purposes. Deferred tax liabilities are recognised for all taxable temporary di�erences, except:

Deferred tax assets are recognised for all deductible temporary di�erences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable pro�t will be available against which the deductible temporary di�erences, and the carry forward of unused tax credits and unused tax losses can be utilised, except:

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that su�cient taxable pro�t will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable pro�ts will allow the deferred tax asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

2.4

Where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, a�ects neither the accounting pro�t nor taxable pro�t or loss.

In respect of taxable temporary di�erences associated with investments in subsidiaries, associates and interests in joint ventures, where the timing of the reversal of the temporary di�erences can be controlled and it is probable that the temporary di�erences will not reverse in the foreseeable future.

Where the deferred tax asset relating to the deductible temporary di�erence arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, a�ects neither the accounting pro�t nor taxable pro�t or loss.

In respect of deductible temporary di�erences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary di�erences will reverse in the foreseeable future and taxable pro�t will be available against which the temporary di�erences can be utilised.




Deferred tax relating to items recognised outside pro�t or loss is recognised outside pro�t or loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity.

Deferred tax assets and deferred tax liabilities are o�set if a legally enforceable right exists to set o� current tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority. Tax bene�ts acquired as part of a business combination, but not satisfying the criteria for separate recognition at that date, would be recognised subsequently if new information about facts and circumstances changed. The adjustment would either be treated as a reduction to goodwill (as long as it does not exceed goodwill) if it is incurred during the measurement period or in pro�t or loss.

Value Added Tax and National Health Insurance Levy (Vat & Nhil)Revenues, expenses and assets are recognised net of the amount of VAT & NHIL, except:

Non-current Assets Held For Sale and Discontinued OperationsNon-current assets and disposal Companies classi�ed as held for sale are measured at the lower of their carrying amount and fair value less costs to sell. Non-current assets and disposal Companies are classi�ed as held for sale if their carrying amounts will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset or disposal Institution is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classi�cation.

Property, plant and equipment and intangible assets once classi�ed as held for sale are not depreciated or amortised.

Property, Plant and EquipmentProperty, plant and equipment is stated at cost, net of accumulated depreciation and/or accumulated impairment losses, if any. Such cost includes the cost of replacing component parts of the property, plant and equipment and borrowing costs for long-term construction projects if the recognition criteria are met.

When signi�cant parts of property, plant and equipment are required to be replaced at intervals, the Institution derecognises the replaced part, and recognises the new part with its own associated useful life and depreciation. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satis�ed. All other repair and maintenance costs are recognised in the statement of pro�t or loss as incurred. The present value of the expected cost for the decommissioning of the asset after its use is included in the cost of the respective asset if the recognition criteria for a provision are met.

Land and buildings are measured at cost less accumulated depreciation on buildings and impairment losses recognised. Valuations are performed with su�cient frequency to ensure that the fair value of a revalued asset does not di�er materially from its carrying amount.

Any revaluation surplus is recognised in other comprehensive income and accumulated in equity in the asset revaluation reserve, except to the extent that it reverses a revaluation decrease of the same asset previously recognised in the statement of pro�t or loss, in which case the increase is recognised in the statement of pro�t or loss. A revaluation de�cit is recognised in the statement of pro�t or loss, except to the extent that it o�sets an existing surplus on the same asset recognised in the asset revaluation reserve.

Where the taxes and levies incurred on a purchase of assets or services are not recoverable from the taxation authority, in which case the taxes are recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable.

Receivables and payables are stated with the amount of taxes and levies include the net amount of taxes and levies recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of �nancial position.

2.5

2.6




Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets as follows:

An item of property, plant and equipment and any signi�cant part initially recognised is derecognised upon disposal or when no future economic bene�ts are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the di�erence between the net disposal proceeds and the carrying amount of the asset) is included in the statement of pro�t or loss when the asset is derecognised. The assets’ residual values, useful lives and methods of depreciation are reviewed at each �nancial year end and adjusted prospectively, if appropriate.

LeasesThe determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at the inception date, whether ful�llment of the arrangement is dependent on the use of a speci�c asset or assets or the arrangement conveys a right to use the asset, even if that right is not explicitly speci�ed in an arrangement. For arrangements entered into prior to 1 January 2011, the date of inception is deemed to be 1 January 2011 in accordance with the IFRS 1.

The Institution as a lesseeFinance leases which transfer to the Institution substantially all the risks and bene�ts incidental to ownership of the leased item, are capitalised at the commencement of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between �nance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised in �nance costs in the statement of pro�t or loss. A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Institution will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.

Operating lease payments are recognised as an operating expense in the statement of pro�t or loss on a straight-line basis over the lease term.

The Institution as a lessorLeases in which the Institution does not transfer substantially all the risks and bene�ts of ownership of the asset are classi�ed as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same bases as rental income. Contingent rents are recognised as revenue in the period in which they are earned.

Borrowing CostsBorrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective assets. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

Freehold landBuildingsLeasehold premisesPlant and machineryMotor vehiclesComputersO�ce equipmentFurniture and �ttings

Nil2%

10%20%20%

33.33%20%20%

2.7

2.8




2.9

2.10

2.11

i.

Investment PropertiesInvestment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at fair value, which re�ects market conditions at the reporting date. Gains or losses arising from changes in the fair values of investment properties are included in the statement of pro�t or loss in the period in which they arise. Fair values are evaluated annually by an accredited external, independent valuer, applying a valuation model recommended by the International Valuation Standards Committee. Investment properties are derecognised when either they have been disposed of or when the investment property is permanently withdrawn from use and no future economic bene�t is expected from its disposal. The di�erence between the net disposal proceeds and the carrying amount of the asset is recognised in the statement of pro�t or loss in the period of derecognition.

Transfers are made to or from investment property only when there is a change in use. For a transfer from investment property to owner-occupied property, the deemed cost for subsequent accounting is the fair value at the date of change. If owner-occupied property becomes an investment property, the Institution accounts for such property in accordance with the policy stated under property, plant and equipment up to the date of change.

Intangible AssetsIntangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses, if any. Internally generated intangible assets, excluding capitalised development costs, are not capitalised and expenditure is re�ected in the statement of pro�t or loss in the year in which the expenditure is incurred.

The useful lives of intangible assets are assessed as either �nite or inde�nite. Intangible assets with �nite lives are amortised over their useful economic lives and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a �nite useful life is reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic bene�ts embodied in the asset is accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with �nite lives is recognised in the statement of pro�t or loss in the expense category consistent with the function of the intangible assets.

Intangible assets with inde�nite useful lives are not amortised, but are tested for impairment annually, either individually or at the cash-generating unit level. The assessment of inde�nite life is reviewed annually to determine whether the inde�nite life continues to be supportable. If not, the change in useful life from inde�nite to �nite is made on a prospective basis. Gains or losses arising from derecognition of an intangible asset are measured as the di�erence between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of pro�t or loss when the asset is derecognised.

Financial Instruments —Initial Recognition and Subsequent Measurement

Financial Assets

Initial Recognition and MeasurementFinancial assets within the scope of IAS 39 are classi�ed as �nancial assets at fair value through pro�t or loss, loans and receivables, held-to-maturity investments, available-for-sale �nancial assets, or as derivatives designated as hedging instruments in an e�ective hedge, as appropriate. The Institution determines the classi�cation of its �nancial assets at initial recognition.

All �nancial assets are recognised initially at fair value plus, in the case of assets not at fair value through pro�t or loss, directly attributable transaction costs.




Purchases or sales of �nancial assets that require delivery of assets within a time frame established by regulation or convention in the marketplace (regular way trades) are recognised on the trade date, i.e., the date that the Institution commits to purchase or sell the asset.

The Institution’s �nancial assets include cash and short-term deposits, trade and other receivables, loans and other receivables, quoted and unquoted �nancial instruments and derivative �nancial instruments.

Subsequent MeasurementThe subsequent measurement of �nancial assets depends on their classi�cation as follows:

Financial Assets at Fair Value through Pro�t or LossFinancial assets at fair value through pro�t or loss include �nancial assets held for trading and �nancial assets designated upon initial recognition at fair value through pro�t or loss. Financial assets are classi�ed as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. This category includes derivative �nancial instruments entered into by the Institution that are not designated as hedging instruments in hedge relationships as de�ned by IAS 39. Derivatives, including separated embedded derivatives are also classi�ed as held for trading unless they are designated as e�ective hedging instruments. Financial assets at fair value through pro�t and loss are carried in the statement of �nancial position at fair value with changes in fair value recognised in �nance income or �nance costs in the statement of pro�t or loss.

The Institution has not designated any �nancial assets upon initial recognition as at fair value through pro�t or loss.

The Institution evaluates its �nancial assets held for trading, other than derivatives, to determine whether the intention to sell them in the near term is still appropriate. When the Institution is unable to trade these �nancial assets due to inactive markets and management’s intention to sell them in the foreseeable future signi�cantly changes, the Institution may elect to reclassify these �nancial assets in rare circumstances. The reclassi�cation to loans and receivables, available-for-sale or held to maturity depends on the nature of the asset. This evaluation does not a�ect any �nancial assets designated at fair value through pro�t or loss using the fair value option at designation.

Derivatives embedded in host contracts are accounted for as separate derivatives and recorded at fair value if their economic characteristics and risks are not closely related to those of the host contracts and the host contracts are not held for trading or designated at fair value though pro�t or loss. These embedded derivatives are measured at fair value with changes in fair value recognised in the statement of pro�t or loss. Reassessment only occurs if there is a change in the terms of the contract that signi�cantly modi�es the cash �ows that would otherwise be required.

Loans and ReceivablesLoans and receivables are non-derivative �nancial assets with �xed or determinable payments that are not quoted in an active market. After initial measurement, such �nancial assets are subsequently measured at amortised cost using the e�ective interest rate method (EIR), less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in �nance income in the statement of pro�t or loss. The losses arising from impairment are recognised in the statement of pro�t or loss in �nance costs.

Held-to-maturity InvestmentsNon-derivative �nancial assets with �xed or determinable payments and �xed maturities are classi�ed as held-to-maturity when the Institution has the positive intention and ability to hold them to maturity. After initial measurement, held-to-maturity investments are measured at amortised cost using the e�ective interest method, less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in �nance income in the statement of pro�t or loss. The losses arising from impairment are recognised in the statement of pro�t or loss in �nance costs.




Available-for-sale Financial InvestmentsAvailable-for-sale �nancial investments include equity and debt securities. Equity investments classi�ed as available-for-sale are those, which are neither classi�ed as held for trading nor designated at fair value through pro�t or loss. Debt securities in this category are those which are intended to be held for an inde�nite period of time and which may be sold in response to needs for liquidity or in response to changes in the market conditions.

After initial measurement, available-for-sale �nancial investments are subsequently measured at fair value with unrealised gains or losses recognised as other comprehensive income in the available-for-sale reserve until the investment is derecognised, at which time the cumulative gain or loss is recognised in other operating income, or determined to be impaired, at which time the cumulative loss is reclassi�ed to the statement of pro�t or loss in �nance costs and removed from the available-for-sale reserve. Interest income on available-for-sale debt securities is calculated using the e�ective interest method and is recognised in pro�t or loss.

The Institution evaluates its available-for-sale �nancial assets to determine whether the ability and intention to sell them in the near term is still appropriate. When the Institution is unable to trade these �nancial assets due to inactive markets and management’s intention to do so signi�cantly changes in the foreseeable future, the Institution may elect to reclassify these �nancial assets in rare circumstances. Reclassi�cation to loans and receivables is permitted when the �nancial assets meet the de�nition of loans and receivables and the Institution has the intent and ability to hold these assets for the foreseeable future or until maturity. Reclassi�cation to the held-to-maturity category is permitted only when the entity has the ability and intention to hold the �nancial asset accordingly.

For a �nancial asset reclassi�ed out of the available-for-sale category, any previous gain or loss on that asset that has been recognised in equity is amortised to pro�t or loss over the remaining life of the investment using the EIR. Any di�erence between the new amortised cost and the expected cash �ows is also amortised over the remaining life of the asset using the EIR. If the asset is subsequently determined to be impaired, then the amount recorded in equity is reclassi�ed to the statement of pro�t or loss.

DerecognitionA �nancial asset (or, where applicable a part of a �nancial asset or part of a group of similar �nancial assets) is derecognised when:

When the Institution has transferred its rights to receive cash �ows from an asset or has entered into a pass-through arrangement, and has neither transferred nor retained substantially all of the risks and rewards of the asset nor transferred control of it, the asset is recognised to the extent of the Institution’s continuing involvement in it.

In that case, the Institution also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that re�ects the rights and obligations that the Institution has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Institution could be required to repay.

The rights to receive cash �ows from the asset have expired.

The Institution has transferred its rights to receive cash �ows from the asset or has assumed an obligation to pay the received cash �ows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Institution has transferred substantially all the risks and rewards of the asset, or (b) the Institution has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.




Impairment of Financial AssetsThe Institution assesses at each reporting date whether there is any objective evidence that a �nancial asset or a group of �nancial assets is impaired. A �nancial asset or a group of �nancial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred ‘loss event’) and that loss event has an impact on the estimated future cash �ows of the �nancial asset or the group of �nancial assets that can be reliably estimated. Evidence of impairment may include indications that the debtors or a group of debtors is experiencing signi�cant �nancial di�culty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other �nancial reorganisation and where observable data indicate that there is a measurable decrease in the estimated future cash �ows, such as changes in arrears or economic conditions that correlate with defaults.

Financial Assets Carried at Amortised CostFor �nancial assets carried at amortised cost, the Institution �rst assesses whether objective evidence of impairment exists individually for �nancial assets that are individually signi�cant, or collectively for �nancial assets that are not individually signi�cant. If the Institution determines that no objective evidence of impairment exists for an individually assessed �nancial asset, whether signi�cant or not, it includes the asset in a group of �nancial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognised are not included in a collective assessment of impairment.

If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the di�erence between the assets carrying amount and the present value of estimated future cash �ows (excluding future expected credit losses that have not yet been incurred). The present value of the estimated future cash �ows is discounted at the �nancial asset’s original e�ective interest rate. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current e�ective interest rate.

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 statement of pro�t or loss. Interest income continues to be accrued on the reduced carrying amount and is accrued using the rate of interest used to discount the future cash �ows for the purpose of measuring the impairment loss. The interest income is recorded as part of �nance income in the statement of pro�t or loss. Loans together with the associated allowance are written o� when there is no realistic prospect of future recovery and all collateral has been realised or has been transferred to the Institution. If, in a subsequent year, the amount of the estimated impairment loss 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. If a future write-o� is later recovered, the recovery is credited to �nance costs in the statement of pro�t or loss.

Available-For-Sale Financial InvestmentsFor available-for-sale �nancial investments, the Institution assesses at each reporting date whether there is objective evidence that an investment or a group of investments is impaired.

In the case of equity investments classi�ed as available-for-sale, objective evidence would include a signi�cant or prolonged decline in the fair value of the investment below its cost. ‘Signi�cant’ is evaluated against the original cost of the investment and ‘prolonged’ against the period in which the fair value has been below its original cost. Where there is evidence of impairment, the cumulative loss — measured as the di�erence between the acquisition cost and the current fair value, less any impairment loss on that investment previously recognised in the statement of pro�t or loss — is removed from other comprehensive income and recognised in the statement of pro�t or loss. Impairment losses on equity investments are not reversed through the statement of pro�t or loss; increases in their fair value after impairments are recognised directly in other comprehensive income.

ii.




In the case of debt instruments classi�ed as available-for-sale, impairment is assessed based on the same criteria as �nancial assets carried at amortised cost. However, the amount recorded for impairment is the cumulative loss measured as the di�erence between the amortised cost and the current fair value, less any impairment loss on that investment previously recognised in the statement of pro�t or loss.

Future interest income continues to be accrued based on the reduced carrying amount of the asset, using the rate of interest used to discount the future cash �ows for the purpose of measuring the impairment loss. The interest income is recorded as part of �nance income. If, in a subsequent year, the fair value of a debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in the statement of pro�t or loss, the impairment loss is reversed through the statement of pro�t or loss.

Financial Liabilities

Initial recognition and measurementFinancial liabilities within the scope of IAS 39 are classi�ed as �nancial liabilities at fair value through pro�t or loss, loans and borrowings, or as derivatives designated as hedging instruments in an e�ective hedge, as appropriate. The Institution determines the classi�cation of its �nancial liabilities at initial recognition.

All �nancial liabilities are recognised initially at fair value and, in the case of loans and borrowings, carried at amortised cost. This includes directly attributable transaction costs.

The Institution’s �nancial liabilities include trade and other payables, bank overdrafts, loans and borrowings, �nancial guarantee contracts, and derivative �nancial instruments.

Subsequent MeasurementThe measurement of �nancial liabilities depends on their classi�cation as follows:

Financial liabilities at fair value through pro�t or lossFinancial liabilities at fair value through pro�t or loss include �nancial liabilities held for trading and �nancial liabilities designated upon initial recognition as at fair value through pro�t or loss. Financial liabilities are classi�ed as held for trading if they are acquired for the purpose of selling in the near term. This category includes derivative �nancial instruments entered into by the Institution that are not designated as hedging instruments in hedge relationships as de�ned by IAS 39. Separated embedded derivatives are also classi�ed as held for trading unless they are designated as e�ective hedging instruments.

Gains or losses on liabilities held for trading are recognised in the statement of pro�t or loss.

The Institution has not designated any �nancial liabilities upon initial recognition as at fair value through pro�t or loss.

Loans and BorrowingsAfter initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the e�ective interest rate method. Gains and losses are recognised in the statement of pro�t or loss when the liabilities are derecognised as well as through the e�ective interest rate method (EIR) amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in �nance costs in the statement of pro�t or loss.

iii.




DerecognitionA �nancial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.

When an existing �nancial liability is replaced by another from the same lender on substantially di�erent terms, or the terms of an existing liability are substantially modi�ed, such an exchange or modi�cation is treated as a derecognition of the original liability and the recognition of a new liability, and the di�erence in the respective carrying amounts is recognised in the statement of pro�t or loss.

O�setting of Financial InstrumentsFinancial assets and �nancial liabilities are o�set and the net amount reported in the statement of �nancial position if, and only if, there is a currently enforceable legal right to o�set the recognised amounts and there is an intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.

Fair Value of Financial InstrumentsThe fair value of �nancial instruments that are traded in active markets at each reporting date is determined by reference to quoted market prices or dealer price quotations (bid price for long positions and ask price for short positions), without any deduction for transaction costs.

For �nancial instruments not traded in an active market, the fair value is determined using appropriate valuation techniques. Such techniques may include using recent arm’s length market transactions; reference to the current fair value of another instrument that is substantially the same; a discounted cash �ow analysis or other valuation models.

InventoriesInventories are valued at the lower of cost and net realisable value.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

Impairment of Non-�nancial AssetsThe Institution assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Institution estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (CGU) fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash in�ows that are largely independent of those from other assets or Institution’s of assets.

Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash �ows are discounted to their present value using a pre-tax discount rate that re�ects current market assessments of the time value of money and the risks speci�c to the asset. In determining fair value less costs to sell, recent market transactions are taken into account, if available. If no such transactions can be identi�ed, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded subsidiaries or other available fair value indicators.

The Institution bases its impairment calculation on detailed budgets and forecast calculations which are prepared separately for each of the Institution’s cash-generating units to which the individual assets are allocated. These budgets and forecast calculations are generally covering a period of �ve years. For longer periods, a long term growth rate is calculated and applied to project future cash �ows after the �fth year.

Impairment losses of continuing operations, including impairment on inventories, are recognised in the statement of pro�t or loss in those expense categories consistent with the function of the impaired asset, except for a property previously revalued where the revaluation was taken to other comprehensive income. In this case, the impairment is also recognised in other comprehensive income up to the amount of any previous revaluation.

2.12

2.13

v.

iv.




For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the Institution estimates the asset’s or cash-generating unit’s recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the statement of pro�t or loss unless the asset is carried at a revalued amount, in which case the reversal is treated as a revaluation increase.

Intangible AssetsIntangible assets with inde�nite useful lives are tested for impairment annually as at 31 December either individually or at the cash-generating unit level, as appropriate and when circumstances indicate that the carrying value may be impaired.

Cash and Short-term DepositsCash and short-term deposits in the statement of �nancial position comprise cash at banks and on hand and short-term deposits with a maturity of three months or less.For the purpose of the statement cash �ows, cash and cash equivalents consist of cash and short-term deposits as de�ned above, net of outstanding bank overdrafts.

Translation of Foreign CurrenciesThe Institution’s functional currency is the Ghana Cedi. In preparing the statement of �nancial position of the Institution, transactions in currencies other than Ghana Cedis are recorded at the rates of exchange prevailing on the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at the end of the reporting period. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange di�erences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in the statement of comprehensive income. Exchange di�erences arising on the retranslation of non-monetary items carried at fair value are included in the statement of comprehensive income for the period except for di�erences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised directly in shareholders’ equity. For such non-monetary items, any exchange component of that gain or loss is also recognised directly in the shareholders’ equity.

Provisions

GeneralProvisions are recognised when the Institution has a present obligation (legal or constructive) as a result of a past event, it is probable that an out�ow of resources embodying economic bene�ts will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Institution expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of pro�t or loss net of any reimbursement.

If the e�ect of the time value of money is material, provisions are discounted using a current pre-tax rate that re�ects, where appropriate, the risks speci�c to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a �nance cost.

2.15

2.14

2.16




Employee Bene�ts

Events after the Reporting PeriodThe Institution adjusts the amounts recognised in its �nancial statements to re�ect events that provide evidence of conditions that existed at the end of the reporting period.

Where there are material events that are indicative of conditions that arose after the reporting period, the Institution discloses, by way of note, the nature of the event and the estimate of its �nancial e�ect, or a statement that such an estimate cannot be made.

Stated CapitalStated capital is classi�ed as equity when there is no obligation to transfer cash or other assets. Incremental costs directly attributable to the issue of equity instruments are shown in equity as a deduction from the proceeds, net of tax. Incremental costs directly attributable to the issue of equity instruments as consideration for the acquisition of a business are included in the cost of acquisition.

Standards and Interpretations in issue not yet Adopted

New and Revised Standards, Amendments and Interpretations

The standards and interpretations that are issued, but not yet e�ective, up to the date of issuance of the Company’s �nancial statements are disclosed below. The company intends to adopt these standards, if applicable, when they become e�ective.

The cost of short-term employee bene�ts are recognised as an expense in the period when the economic bene�t is given, as an employment cost. Unpaid short-term employee bene�ts as at the end of the accounting period are recognised as an accrued expense and any short-term bene�t paid in advance are recognised 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 recognised as an expense in the statement of comprehensive income at gross. The Institution’s contribution to social security fund is also charged as an expense.

2.18

2.17

2.19

3.

De�ned Contribution PlansDe�ned contribution plans are post-employment bene�t plans under which the Institution pays �xed contributions into a separate fund and has no legal or contractual obligation to pay further contributions if the fund does not hold su�cient asset to pay all employee bene�ts relating to employee service in the current and prior periods. Obligation for contributions to de�ned contribution plans are recognised as an expense in the statement of comprehensive income when they are due.

Short-Term Bene�tsShort-term employee bene�ts 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.

Termination Bene�tsTermination bene�ts are recognised as an expense when the Institution is demonstrably committed, without realistic possibility of withdrawal, to a formal detailed plan to terminate employment before the normal retirement date. Termination bene�ts for voluntary redundancies are recognised if the Institution has made an o�er encouraging voluntary redundancy, it is probable that the o�er will be accepted, and the number of acceptance can be estimated reliably.




IFRS 9 “Financial Instruments” (e�ective for annual periods beginning on or after 1 January 2018).

IFRS 9 “Financial Instruments” issued on 24 July 2014 is the IASB's replacement of IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9 includes requirements for recognition and measurement, impairment, derecognition and general hedge accounting.

Classi�cation and Measurement - IFRS 9 introduces new approach for the classi�cation of �nancial assets, which is driven by cash �ow characteristics and the business model in which an asset is held. This single, principle-based approach replaces existing rule-based requirements under IAS 39. The new model also results in a single impairment model being applied to all �nancial instruments.

Impairment - IFRS 9 has introduced a new, expected-loss impairment model that will require more timely recognition of expected credit losses. Speci�cally, the new Standard requires entities to account for expected credit losses from when �nancial instruments are �rst recognised and to recognise full lifetime expected losses on a more timely basis.

Hedge accounting - IFRS 9 introduces a substantially-reformed model for hedge accounting, with enhanced disclosures about risk management activity. The new model represents a signi�cant overhaul of hedge accounting that aligns the accounting treatment with risk management activities.

Own credit - IFRS 9 removes the volatility in pro�t or loss that was caused by changes in the credit risk of liabilities elected to be measured at fair value. This change in accounting means that gains caused by the deterioration of an entity’s own credit risk on such liabilities are no longer recognised in pro�t or loss.

IFRS 14 “Regulatory Deferral Accounts” (e�ective for annual periods beginning on or after 1 January 2016).

IFRS 14 “Regulatory Deferral Accounts” issued by IASB on 30 January 2014. This Standard is intended to allow entities that are �rst-time adopters of IFRS, and that currently recognise regulatory deferral accounts in accordance with their previous GAAP, to continue to do so upon transition to IFRS.

IFRS 15 “Revenue from Contracts with Customers” and further amendments (e�ective for annual periods beginning on or after 1 January 2018).

IFRS 15 “Revenue from Contracts with Customers” issued by IASB on 28 May 2014 (on 11 September 2015 IASB deferred e�ective date of IFRS 15 to 1 January 2018). IFRS 15 speci�es how and when an IFRS reporter will recognise revenue as well as requiring such entities to provide users of �nancial statements with more informative, relevant disclosures. The standard supersedes IAS 18 “Revenue”, IAS 11 “Construction Contracts” and a number of revenue-related interpretations. Application of the standard is mandatory for all IFRS reporters and it applies to nearly all contracts with customers: the main exceptions are leases, �nancial instruments and insurance contracts. The core principle of the new Standard is for companies to recognise revenue to depict the transfer of goods or services to customers in amounts that re�ect the consideration (that is, payment) to which the company expects to be entitled in exchange for those goods or services. The new Standard will also result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively (for example, service revenue and contract modi�cations) and improve guidance for multiple-element arrangements.

Amendments to IFRS 10 “Consolidated Financial Statements” and IAS 28 “Investments in Associates and Joint Ventures” - Sale or Contribution of Assets between an Investor and its Associate or Joint Venture and further amendments (e�ective date was deferred inde�nitely until the research project on the equity method has been concluded).

Amendments to IFRS 10 “Consolidated Financial Statements” and IAS 28 “Investments in Associates and Joint Ventures” - Sale or Contribution of Assets between an Investor and its Associate or Joint Venture issued by IASB on 11 September 2014 (on 17 December 2015 IASB deferred inde�nitely e�ective date). The amendments address a con�ict between the requirements of IAS 28 and IFRS 10 and clarify that in a transaction involving an associate or




joint venture the extent of gain or loss recognition depends on whether the assets sold or contributed constitute a business.

Amendments to IFRS 10 “Consolidated Financial Statements”, IFRS 12 “Disclosure of Interests in Other Entities” and IAS 28 “Investments in Associates and Joint Ventures” - Investment Entities: Applying the Consolidation Exception (e�ective for annual periods beginning on or after 1 January 2016).

Amendments to IFRS 10 “Consolidated Financial Statements”, IFRS 12 “Disclosure of Interests in Other Entities” and IAS 28 “Investments in Associates and Joint Ventures” - Investment Entities: Applying the Consolidation Exception issued by IASB on 18 December 2014. The narrow-scope amendments to IFRS 10, IFRS 12 and IAS 28 introduce clari�cations to the requirements when accounting for investment entities. The amendments also provide relief in particular circumstances.

Amendments to IFRS 11 “Joint Arrangements” – Accounting for Acquisitions of Interests in Joint Operations (e�ective for annual periods beginning on or after 1 January 2016).

Amendments to IFRS 11 “Joint Arrangements” – Accounting for Acquisitions of Interests in Joint Operations issued by IASB on 6 May 2014. The amendments add new guidance on how to account for the acquisition of an interest in a joint operation that constitutes a business. The amendments specify the appropriate accounting treatment for such acquisitions.

Amendments to IAS 1 “Presentation of Financial Statements” - Disclosure Initiative (e�ective for annual periods beginning on or after 1 January 2016).

Amendments to IAS 1 “Presentation of Financial Statements” - Disclosure Initiative issued by IASB on 18 December 2014. The amendments to IAS 1 are designed to further encourage companies to apply professional judgement in determining what information to disclose in their �nancial statements. For example, the amendments make clear that materiality applies to the whole of �nancial statements and that the inclusion of immaterial information can inhibit the usefulness of �nancial disclosures. Furthermore, the amendments clarify that companies should use professional judgement in determining where and in what order information is presented in the �nancial disclosures.

Amendments to IAS 16 “Property, Plant and Equipment” and IAS 38 “Intangible Assets” - Clari�cation of Acceptable Methods of Depreciation and Amortisation (e�ective for annual periods beginning on or after 1 January 2016).

Amendments to IAS 16 “Property, Plant and Equipment” and IAS 38 “Intangible Assets” - Clari�cation of Acceptable Methods of Depreciation and Amortisation issued by IASB on 12 May 2014. Amendments clarify that the use of revenue-based methods to calculate the depreciation of an asset is not appropriate because revenue generated by an activity that includes the use of an asset generally re�ects factors other than the consumption of the economic bene�ts embodied in the asset. Amendments also clarify that revenue is generally presumed to be an inappropriate basis for measuring the consumption of the economic bene�ts embodied in an intangible asset. This presumption, however, can be rebutted in certain limited circumstances.

Amendments to IAS 16 “Property, Plant and Equipment” and IAS 41 “Agriculture” - Agriculture: Bearer Plants (e�ective for annual periods beginning on or after 1 January 2016).

Amendments to IAS 16 “Property, Plant and Equipment” and IAS 41 “Agriculture” - Agriculture: Bearer Plants issued by IASB on 30 June 2014. The amendments bring bearer plants, which are used solely to grow produce, into the scope of IAS 16 so that they are accounted for in the same way as property, plant and equipment.

Amendments to IAS 27 “Separate Financial Statements” - Equity Method in Separate Financial Statements (e�ective for annual periods beginning on or after 1 January 2016).

Amendments to IAS 27 “Separate Financial Statements” - Equity Method in Separate Financial Statements issued by IASB on 12 August 2014. The amendments reinstate the equity method as an accounting option for investments in




subsidiaries, joint ventures and associates in an entity's separate �nancial statements.

Amendments to various standards “Improvements to IFRSs (cycle 2012-2014)” issued by IASB on 25 September 2014. Amendments to various standards and interpretations resulting from the annual improvement project of IFRS (IFRS 5, IFRS 7, IAS 19 and IAS 34) primarily with a view to removing inconsistencies and clarifying wording. The revisions clarify the required accounting recognition in cases where free interpretation used to be permitted. Changes include new or revised requirements regarding: (i) changes in methods of disposal; (ii) servicing contracts; (iii) applicability of the amendments to IFRS 7 to condensed interim �nancial statements; (iv) discount rate: regional market issue; (v) disclosure of information 'elsewhere in the interim �nancial report'. The amendments are to be applied for annual periods beginning on or after 1 January 2016.

The Entity has elected not to adopt these new standards and amendments to existing standards in advance of their e�ective date. The Entity anticipates that the adoption of these standards and amendments to existing standards will have no material impact on the �nancial statements of the Entity in the period of initial application.

Use of Judgments, Estimates and AssumptionsThe preparation of the Institution’s �nancial statements in conformity with IFRSs requires management to make judgments, estimates and assumptions that a�ect the application of policies, the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the end of the reporting period. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability a�ected in future periods.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods a�ected.

JudgmentsIn the process of applying the Institution’s accounting policies, management has made the following judgments, which have the most signi�cant e�ect on the amounts recognised in the consolidated �nancial statements:

Estimates and AssumptionsThe key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a signi�cant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next �nancial year, are described below. The Institution based its assumptions and estimates on parameters available when the �nancial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising beyond the control of the Institution. Such changes are re�ected in the assumptions when they occur.

Estimates and assumptions which are reviewed on a continuous basis are recognised in the period in which the estimate is revised if the revision a�ects only that period or in the period of the revision and future periods if the revision a�ects both current and future periods.

Loan Loss ProvisioningThe estimation of the ultimate liability arising from loans and advances is the Institution’s most critical accounting estimate. There are several sources of uncertainty that need to be considered in the estimation of the liability that the Institution ultimately recognises as credit impairment allowance. For example loans and advances at any given date expose the Institution to the risk of default and inability to realise the related collateral to adequately cover for the loss.

Impairment of Available-for-sale Financial AssetsThe company assesses at each reporting date whether there is objective evidence that available-for-sale �nancial assets are impaired and impairment loss determined when the fair value of the asset is signi�cantly less than its carrying amount

4.

4.1

4.2




shown in the books of the company. This determination of what is signi�cant requires judgment. In making this judgment, the company evaluates among other factors, the normal volatility in share price, the �nancial health of the investee, industry and sector performance, changes in technology, and operational and �nancing cash �ow. Impairment may be appropriate when there is evidence of deterioration in the �nancial health of the investee, industry and sector performance, changes in technology, and �nancing and operational cash �ows.

Fair Value of Financial InstrumentsThe fair values of �nancial instruments where no active market exists or where quoted prices are not otherwise available are determined by using valuation techniques. In these cases the fair values are estimated from observable data in respect of similar �nancial instruments or using models. Where market observable inputs are not available, they are estimated based on appropriate assumptions. Where valuation techniques (for example, models) are used to determine fair values, they are validated and periodically reviewed by quali�ed personnel independent of those that sourced them. All models are certi�ed before they are used, and models are calibrated to ensure that outputs re�ect actual data and comparative market prices. To the extent practical, models use only observable data; however, areas such as credit risk (both own credit risk and counterparty risk), volatilities and correlations require management to make estimates.

TaxesUncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and the amount and timing of future taxable income. Given the wide range of business relationships and the long-term nature and complexity of existing contractual agreements, di�erences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Institution establishes provisions, based on reasonable estimates, for possible consequences of audits by the tax authorities. The amount of such provisions is based on various factors, such as experience of previous tax audits and di�ering interpretations of tax regulations by the Institution and the tax authority.Deferred tax assets are recognised for all unutilsed capital allowances to the extent that it is probable that taxable pro�t will be available against which the capital allowances can be utilised. Signi�cant management judgment is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable pro�ts together with future tax planning strategies.

Useful Economic Life of Property, Plant and EquipmentTo a large extent, the �nancial statements are based on estimates, judgments and models rather than exact depictions of reality. Providing relevant information about the Company’s Property, plant and equipment requires estimates and other judgments. This includes, measuring the cost of an item of Property, plant and equipment including PPE that are self-constructed. The subsequent allocation of depreciation involves further judgments and estimates including:

Allocating the cost of the asset to particular major components;Determining the most appropriate depreciation method;Estimating useful life; andEstimating residual value.




5.

Placements and special deposits

Investment securities

Loans and advances

28,112,962

3,244,945

45,512,712

76,870,619

8,827,440

1,691,356

47,679,185

58,197,981

2015 GH¢

2014 GH¢

Interest Income

6.

Current Accounts

Time and other deposits

Savings

155,233

29,749,917

2,516,093

32,421,243

85,724

21,103,077

2,781,087

23,969,888

Interest Expenses

7.

Loan Processing Fees

Account Maintenance Fee

Other Commissions

4,213,866

306,887

580,889

5,101,642

-

258,051

244,515

502,566

Commissions and Fees

8.

Pro�t on disposal 57,157 830

Other Income




9.

Sta� Costs (Note 10)

Advertising and Marketing

Administrative Expenses

Depreciation

Directors' Emoluments

Auditors' Remuneration

Rent

Others

22,771,362

1,194,545

9,893,012

1,608,086

79,860

60,000

900,552

3,021,127

39,528,544

18,610,535

547,294

6,023,300

2,408,827

108,400

45,000

761,058

1,096,801

29,601,215

2015 GH¢

2014 GH¢

Operating Expenses

10.

Sta� salaries and allowances

Social security cost

Others

15,747,638

2,691,692

4,332,032

22,771,362

15,171,746

1,927,945

1,510,844

18,610,535

Sta� Costs

11.

Speci�c Impairment

Portfolio impairments 2,804,116

610,971

(2,193,145) 867,744

-

867,744

Credit Impairment Loss

12.

a.Current Tax [Note 12 (c)]

Under provision

Deferred Tax [Note 12 (e)]

1,361,754

-

1,361,754

(607,428)

754,326

952,696

61,774

1,014,470

(181,379)

833,091

Taxation

Income Tax Expense



uniCredit 2015 Annual Report |39

c. Current Tax

d. National Fiscal Stabilisation Levy

Tax at applicable tax rate at 25%

Tax e�ect of non-deductible expenses

Tax e�ect of non-chargeable income

Tax e�ect of allowable expenditure

Tax e�ect of capital allowances

Origination/Reversal of temporary di�erences

Income Tax Expense

E�ective tax rate

9,468,660

2,367,165

-

(470,082)

-

(988,327)

(154,430)

754,326

7.97%

-

-

-

1,361,754

1,361,754

4,262,530

1,065,633

339,340

(208,989)

61,774

(243,288)

(181,379)

833,091

23.48%

2015 GH¢

2014 GH¢

Pro�t before Taxation

The tax charge in the Income Statement di�ers from the theoretical amount that would arise using the statutory income tax rate. This is explained as follows:

b. Reconciliation of E�ective Tax

Paymentsduring the year

GH¢

-

(1,361)

14,214

(277,186)

(264,333)

Balance at 31December

GH¢

-

-

-

(1,638,940)

(1,638,940)

Charge/(Credit)for the year

GH¢

-

-

-

-

-

Under/(Over)Provision

GH¢

-

(1,361)

14,214

-

12,853

Balance at January

GH¢

2010-2012

2013

2014

2015

-

-

473,433

473,433

Paymentsduring the year

GH¢

-

109,755

172,704

282,459

Balance at 31December

GH¢

-

-

(300,729)

(300,729)

Charge/(Credit)for the year

GH¢

-

-

-

-

Under/(Over)Provision

GH¢

-

109,755

-

109,755

Balance at January

GH¢

2013

2014

2015




e.

Balance at 1 January

Charge to pro�t or loss

Balance at 31 December

Deferred Tax Liabilities

Property and equipment

Portfolio impairment

974,452

(607,428)

367,024

1,155,831

(181,379)

974,452

2015 GH¢

2014 GH¢

Cash on hand

Bank balances

8,594,621

16,705,574

25,300,195

4,823,262

3,083,100

7,906,362

(452,998)

(154,430)

(607,428)

(179 ,692)

(1,687)

(181, 379)

Deferred Tax

13. Cash and Bank Balances

Treasury Bills

Commercial paper

Unifund account

Fixed deposits

13,936,265

33,718,824

12,297

92,189,968

139,857,355

10,474,229

6,762,141

11,801

56,240,219

73,488,390

14. Held to Maturity Financial Assets

Deferred tax assets and liabilities are attributed to the following:




15.

Customers

Sta�

Others

Gross Loans & Advances

Interest in suspense

Less: Unamortised processing fees

Less: Credit impairment allowance

Net loans & Advances

Unamortised Processing Fees


Additions during the year

Released into income

Balance at 31 December

Credit Impairment Allowance Account


Charge for the year

Balance at 1 31 December

Analysis by Facility Type

uSolar loans

Sta� loans

Susu loans

Own vehicle loans

Commercial loans and advances

101,444,675

9,857,424

3,295,907

114,598,006

(8,163,350)

-

(4,836,926)

101,597,730

1,823,175

-

(1,823,175)

-

4,225,955

610,971

4,836,926

272,481

9,857,424

2,324,974

995,415

101,147,712

114,598,006

84,980,562

7,185,640

1,481,277

93,647,479

(863,507)

(1,823,175)

(4,225,955)

86,734,842

1,882,845

1,493,631

(1,553,301)

1,823,175

3,358,211

867,744

4,225,955

43,229

7,182,088

2,745,352

2,164,293

81,512,517

93,647,479

2015 GH¢

2014 GH¢

Loans and Advances to Customers

Analysis by Type




Agriculture, forestry and �shing

Manufacturing

Construction

Commerce and �nance

Transport, storage and communication

Utilities

Services

Miscellaneous

Loan loss provision ratio

Gross non-performing loans ratio

Ratio of 50 largest exposures (funded and non-funded) to exposures

(funded and non-funded)

447,431

15,647,020

3,216,267

70,508,433

10,763,981

700,652

11,173,052

2,141,170

114,598,006

1,032,256

18,191,087

1,110,445

53,758,153

7,049,664

731,652

9,017,418

2,756,804

93,647,479

1%

4%

39%

2%

4%

38%

2015 GH¢

2014 GH¢


Analysis by Business Segment

16.

Stocks

Accounts Receivable

Deposits and Prepaid Expenses

Others

253,758

17,142,342

7,890,979

10,015,739

35,302,818

235,489

12,363,969

3,588,816

5,238,721

21,426,995

Other Assets




Bala

nce

at 1

Jan

2015

Addi

tions

dur

ing

the

year

Dis

posa

ls

Tran

sfer

Bala

nce

as a

t 31

Dec

Dep

reci

atio

n

Bala

nce

at 1

Janu

ary

2015

Char

ge fo

r the

yea

r

Dis

posa

ls

Tran

sfer

Bala

nce

as a

t 31

Dec

201

5

NBV

as

at 3

1 D

ec 2

015

2,06

4,43

8

25,0

00

-

-

2,08

9,43

8 - - -

-

-

2,08

9,43

8

6,72

5,27

2

2,62

7,66

3 -

168

,671

9,52

1,60

6

128,

705

113,

909 -

31,4

33

274,

047

9,24

7,55

9

- - -

7,45

8,72

9

7,45

8,72

9 - - -

1,63

8,80

6

1,63

8,80

6

5,81

9,92

3

416,

237

138,

593

(25,

950)

3,

227

532,

107

675,

111

717,

534

294,

762

(112

,431

)

9,

473

909,

338

1,21

5,92

7

758,

119

361,

769 -

34,7

70

1,15

4,65

8

581,

247

1,03

2,51

8

367,

013 -

575,

125

1,97

4,65

6

3,16

9,99

2

426,

708

155,

477 -

490,

933

1,07

3,11

8

2,05

2,38

4

2,69

6,11

7 - -

(2,6

96,1

17)

-

-

6,17

5,93

8

1,43

1,52

3

(138

,381

)

87,6

50

7,55

6,73

0

24,8

51,5

81

644,

892

614,

226

(51,

900)

-

1,20

7,21

8

1,33

2,79

6

989,

900

(197

,431

)

-

2,12

5,26

5

1,20

9,75

3

526,

152 -

-

1,73

5,90

5

Land

G

H¢

Cost

Build

ings

GH

¢

Leas

ehol

dpr

emis

esG

H¢

Plan

t &m

achi

nery

GH

¢

Mot

orve

hicl

eG

H¢

Com

pute

rha

rdw

are

GH

¢

2,01

1,62

6

1,23

7,80

3 -

1,89

5,21

9

5,14

4,64

8

700,

582

545,

219 -

1,87

9,70

1

3,12

5,50

2

5,60

1,32

9

5,93

0,99

1

(130

,000

)

(11,

402,

320)

-

20,2

90,6

88

12,4

96,9

54

(379

,331

)

-

32,4

08,3

11

O�

ceeq

uipm

ent

GH

¢

Furn

itur

e&

�tt

ings

GH

¢

Cap

ital

Wor

kin

Pro

gres

sG

H¢

Tota

lG

H¢

17.

Prop

erty,

Plan

t and

Equip

men

t

For t

he y

ear e

nded

31

Dec

embe

r 201

5

Not

es to

the

Fina

ncia

l Sta

tem

ent

uniC

redi

t 201

5 A

nnua

l Rep

ort |

44

Bala

nce

at 1

Jan

2014

Addi

tions

dur

ing

the

year

Dis

posa

ls

Bala

nce

as a

t 31

Dec

201

4

Dep

reci

atio

n

Bala

nce

at 1

Jan

2014

Char

ge fo

r the

yea

r

Dis

posa

ls

Bala

nce

as a

t 31

Dec

201

4

NBV

as

at 3

1 D

ec 2

014

2,04

8,73

8

15,7

00

-

2,06

4,43

8 - -

-

-

2,06

4,43

8

6,72

5,27

2 -

-

6,72

5,27

2 -

128,

705

-

128,

705

6,59

6,56

7

591,

356

53,5

36

-

644,

892

299,

938

116,

299

-

416,

237

228,

655

459,

866

258,

498

(830

)

717,

534

615,

262

470,

237

287,

882

-

758,

119

451,

634

664,

139

368,

379

-

1,03

2,51

8

979,

108

298,

431

128,

277

-

426,

708

273,

874

1,57

9,81

5

1,11

6,30

2

-

2,69

6,11

7

2,90

5,21

2

3,77

2,42

6

2,40

4,34

2

(830

)

6,17

5,93

8

14,1

14,7

50

840,

511

493,

891

(1,6

06)

1,33

2,79

6

608,

557

601,

196

-

1,20

9,75

3

1,38

8,37

8

623,

248

-

2,01

1,62

6

Land

G

H¢

Cost

/Rev

alua

tion

Build

ings

GH

¢

Plan

t &m

achi

nery

GH

¢

Mot

orve

hicl

eG

H¢

Com

pute

rha

rdw

are

GH

¢

O�

ceeq

uipm

ent

GH

¢

585,

471

115,

111

-

700,

582

3,72

3,23

4

1,87

8,09

5

-

5,60

1,32

9

16,5

11,5

17

3,78

0,77

7

(1,6

06)

20,2

90,6

88

Furn

itur

e&

�tt

ings

GH

¢

Cap

ital W

ork

in P

rogr

ess

GH

¢To

tal

GH

¢

17b.

Prop

erty,

Plan

t and

Equip

men

t

uniC

redi

t 201

5 A

nnua

l Rep

ort |

45

For t

he y

ear e

nded

31

Dec

embe

r 201

5

Not

es to

the

Fina

ncia

l Sta

tem

ent

18.

76,495

1,407,682

1,484,177

75,509

176,563

252,072

76,495

-

76,495

71,024

4,485

75,509

2015 GH¢

2014 GH¢

Intangibles

19.

Current accounts

Time deposit

Savings deposit

Susu deposits

51,438,126

122,009,050

41,202,014

28,612,702

243,261,892

30,347,792

28,475,922

85,810,102

17,996,549

162,630,365

Due to Customers

20.Interest payable

Payment orders

Other creditors & accruals

8,792,877

1,002,064

3,766,057

13,560,998

6,235,487

848,085

2,539,484

9,623,056

Other Liabilities

Cost

Balance at 1 Jan

Additions

Depreciation

Balance at 1 Jan

Charge for the year



1,232,105 986Net book value


Authorised

Number of ordinary shares of no par value

Issued

Number of ordinary shares of no par value

Issued and Fully Paid:

Issued for Cash Consideration

Issued for Consideration other than cash

498,500,000

1,500,000

500,000,000

48,361,981

1,500,000

49,861,981

498,500,000

1,500,000

500,000,000

15,990,981

1,500,000

17,490,981

500,000,000 500,000,000

2015 GH¢

2015Number

2015Value GH¢

2014Value GH¢

2014Number

2014 GH¢

21.

22.

23.

24.

Stated Capital

There is no unpaid liability on any share and there are no shares in treasury

Capital SurplusThis represents the surplus arising from the revaluation of certain items of property and equipment.

Statutory Reserve FundThis represents the cumulative amounts set aside as a non-distributable reserve from annual net pro�t after tax in accordance with Section 29 (1) of the Banking Act, 2004 (Act 673) as amended by the Banking (Amendment) Act of 2007, Act (738). The amounts transferred annually range from 12.5% to 50% of net pro�t after tax, depending on the ratio of the current statutory reserve fund to paid-up capital.

Regulatory Credit Risk ReserveThis represents the excess of provision for bad and doubtful debts in respect of loans as per Bank of Ghana computations guidelines and loan impairment loss provision as per IFRS computations


Transfer from Income surplus

Bal at 31 Dec

881,815

1,427,402

2,309,217

875,066

6,749

881,815

2015 GH¢

2014 GH¢




25.

26.

Cash and Bank Balances

Government Securities – 91 day treasury bills

25,300,195

13,936,265

39,236,460

7,906,362

10,474,229

18,380,591

2015 GH¢

2014 GH¢

Amount due from related parties

Amount due to related parties

Directors’ emoluments

Salaries and other short-term employee bene�ts of

key management and sta�

-

-

-

-

2015 GH¢

2014 GH¢

79,860

22,773,361

22,853,221

108,400

18,610,535

18,718,935

Income SurplusThis represents the residual of cumulative annual pro�ts that are available for distribution to shareholders.

Cash and Cash EquivalentsFor the purposes of the cash �ow statements, cash and cash equivalents comprise balances with less than 91 days maturity from the date of acquisition.

Terms and Conditions of Related Party TransactionsThe transactions with related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31 December 2015, the company has not recorded any impairment of receivables relating to amounts owed by related parties.

27. Related Party This relates to intercompany dealings and transactions with key management personnel.The balances outstanding as at year-end were as follows:

Directors, key management and sta� compensation




28. Fair Values of Financial Assets and Liabilities

Financial Instruments Not Measured at Fair Value

The table below summaries the carrying amounts and fair values of those �nancial assets and liabilities not presented on the statement of �nancial position at their fair values:

Loans and Advances to Other Financial Institutions

Loans and advances to other �nancial institutions include inter-bank placements and items in the course of collection. The carrying amount of �oating rate placements and overnight deposits is a reasonable approximation of fair value.

The estimated fair value of �xed interest bearing deposits is based on discounted cash �ows using prevailing money-market interest rates for debts with similar credit risk and remaining maturity.


Loans and advances are net of charges for impairment. The estimated fair value of loans and advances represents the discounted amount of estimated future cash �ows expected to be received. Expected cash �ows are discounted at current market rates to determine fair value. The carrying amount approximates their fair value.

Deposits from Banks and Due to Customers

The estimated fair value of deposits with no stated maturity, which includes non-interest bearing deposits, is the amount repayable on demand. The estimated fair value of �xed interest-bearing deposits not quoted in an active market is based on discounted cash �ows using interest rates for new debts with similar remaining maturity. The carrying amount of approximates their fair value.

Financial Assets

Cash and bank balance

Held-to-maturity �nancial assets

Loans and advances to customers

Other assets (excluded prepayments)


Customer deposits

Other liabilities

25,300,195

139,857,355

101,597,730

27,411,839

243,261,892

13,560,998

162,630,365

9,623,056

243,261,892

13,560,998

162,630,365

9,623,056

7,906,362

73,488,390

86,734,842

17,838,179

25,300,195

139,857,355

101,597,730

27,411,839

7,906,362

73,488,390

86,734,842

17,838,179

Carrying amount2014

GH¢

Carrying amount2015

GH¢

Fair value2015GH¢

Fair value2014GH¢

i.

ii.

iii.

iv.




O�-balance Sheet Financial Instruments

The estimated fair values of the o�-balance sheet �nancial instruments are based on markets prices for similar facilities. When this information is not available, fair value is estimated using discounted cash �ow analysis.

Fair Value Hierarchy

IFRS 7 speci�es a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs re�ect market data obtained from independent sources; unobservable inputs re�ect the Company’s market assumptions. These two types of inputs have created the following fair value hierarchy:

This hierarchy requires the use of observable market data when available. The Company considers relevant observable market prices in its valuation where possible. Financial instruments measured at fair value at 31 December 2015 were classi�ed as follows:

Contingencies and Commitments

Legal Proceedings and RegulationsAt the reporting date, the Company had neither legal proceedings against it nor against other entities.

Contingent Liabilities There were no contingent liabilities as at reporting date.

CommitmentsThere were no capital commitments as at reporting date.

Financial Risk Management

Introduction and OverviewAn organisation may be exposed to di�erent types of �nancial risks depending on the size and complexity of business activities. uniCredit (Ghana) Limited, however, is generally exposed to credit, market, liquidity, operational, compliance, legal, regulatory and reputational risks.

The Institution’s risk management framework, objectives, policies, procedures and processes for identifying, measuring, monitoring and controlling these risks, and regulatory capital management is presented below;

Risk Management Framework The Board of Directors and Senior Management have developed and established policies and procedures to facilitate e�ective risk management. These policies and procedures provide guidance on risk appetite/tolerance limit, risk identi�cation, monitoring and control and adherence to set risk limits. The risk management policies and procedures are continually reviewed to re�ect changes in economic and �nancial landscape as well as products and services o�ered.

v.

a.

Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities. This level includes listed equity securities and debt instruments on exchanges (for example, The Ghana Stock Exchange). Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices). This level includes the majority of Bank of Ghana’s securities and other derivative contracts.

Level 3 – inputs for the asset or liability that are not based on observable market data (unobservable inputs). This level includes equity investments and debt instruments with signi�cant unobservable components. As at 31 December 2015, the Company did not hold any level 3 �nancial assets and/or liabilities.

29.

30.




b.

The Board of Directors has the overall responsibility for the establishment and oversight of the Institution’s risk management framework. The responsibilities of the Board of Directors include; setting out the Institution’s overall risk appetite/tolerance limit, ensuring that the Institution’s overall risk exposure is maintained at prudent levels and consistent with available capital. They also include; ensuring that Management as well as individuals responsible for Risk Management possess sound expertise and knowledge to accomplish the risk management function and ensuring that appropriate policies and procedures for risk management are in place.

The Board’s sub-committees on audit, credit and the appointment and remuneration as a whole oversee implementation of the broad risk management policies and objectives of the Institution.

Credit Risk

Credit Risk Management Credit Risk stems from outright default due to inability or unwillingness of a client or counterpart to meet commitments in relation to lending, trading settlement and other �nancial transaction. Resultant losses may result in reduction in portfolio value due to the actual or perceived deterioration in loan portfolio quality.

The Board sub-committee on credit is responsible for implementing the credit risk policy/strategy, monitors credit risk on an institution-wide basis and ensures compliance with credit limits to be approved by the Board.

Financial Risk Management (Continued)Business strategies, policies and procedures for managing credit are determined institution-wide with speci�c policies and procedures being adopted for small and medium enterprises and salary loans.

30.

Neither past due nor impaired

Past due but not impaired

Impaired

Gross loans and advances

109,301,054

1,682,681

3,614,271

114,598,006

89,318,903

1,375,057

2,953,519

93,647,479

2015Terms Loans

GH¢

2014Terms Loans

GH¢

Loans and Advances Neither Past Due Nor ImpairedThe credit quality of the portfolio of loans and advances that were neither past due nor impaired can be assessed by reference to the internal rating system adopted by the Company. These loans are all classi�ed as current.

Loans and Advances Past Due but Not ImpairedLoans and advances less than 90 days past due are not considered impaired, unless other information is available to indicate the contrary. Gross amount of loans and advances by class to customers that were past due but not impaired were as follows:




Past due up to 30 days

Past due 30-60 days

Past due 60-90 days

Standard

Substandard

Doubtful

Loss

<90

91-180

181-360

Over 360

1

20

50

100

Cash and bank balance

Held-to-maturity �nancial assets

Loans and advances to customers

Repossessed Collateral

There were no repossessed assets as at 31 December 2015 (2014: nil).

Maximum Exposure to Credit Risk

982,681

420,401

279,599

25,300,195

139,857,355

101,597,730

266,755,280

803,029

343,544

228,484

7,906,362

73,488,390

86,734,842

168,129,594

2015GH¢

Credit Risk Rating Days Past Due Minimum Provision Required (%)

2014GH¢

Financial Risk Management (Continued)

Managing Problem Loans The Recoveries Unit within the Credit Department manages delinquent facilities including outright recoveries or nursing of such problem loans back to health.

At delinquent and past due stages, where recovery e�orts are unsuccessful, the Credit Department refers the client to the Institution’s legal department.

Provisioning for Loans and Advances Credit losses are anticipated and charged in the Statement of Pro�t or Loss and Comprehensive Income on monthly basis. The balance in the impairment allowance account is always equal to at least the required provisions based on the Institution’s current risk rating pro�le. If the status of the loan worsens, the balance of the provision account is increased by an additional charge against earnings.

In conformity with Bank of Ghana‘s directives, the minimum provision that are held are as follows;

30.

Market RiskMarket risk is the potential for loss resulting from adverse movement in risk factors such as interest rates, and equity and commodity prices. The Institution’s Finance & Administration Department has oversight for market risk management.

c.




Interest Rate RiskIn order to quantify the Institution’s exposures to structural interest rate risk, assets and liabilities with �xed and �oating rates are analyzed to identify any gap. Maturities on outstanding positions are determined on the basis of contractual terms governing transactions.

Liquidity RiskThe Institution’s liquidity risk management systems comprise two main processes;


Maturities of �nancial assets and liabilities are as follows:

d.

e.

Assessment of the Institution’s �nancing requirements on the basis of budgets and forecasts in order to plan appropriate funding sources and;

Analysis of daily cash report to monitor daily cash �ow position.

25,300,195

-

41,008,600

66,308,795

-

139,857,355

48,422,522

188,279,877

-

-

25,166,884

25,166,884

25,300,195

139,857,355

114,598,006

279,755,556

-

-

-

-

3 Months or less

GH¢

> 3 Months< than 1 year

GH¢

> 1 year <than 3 years

GH¢

3 years and over

GH¢TotalGH¢

Financial Assets

Cash & bank balances with uniBank



148,257,983

-

148,257,982

95,003,909

13,560,998

108,564,907

-

-

-

243,261,892

13,560,998

256,822,890

-

-

-


Customer Deposits

Other Liabilities

30.

At 31 December 2015

7,906,362

-

33,511,508

41,417,870

-

73,488,390

39,570,035

113,058,425

-

-

20,565,936

20,565,936

7,906,362

73,488,390

93,647,479

175,042,231

-

-

-

-

3 Months or less

GH¢

> 3 Months< than 1 year

GH¢

> 1 year <than 3 years

GH¢

3 years and over

GH¢TotalGH¢

Financial Assets

Cash & bank balances with uniBank



99,116,428

-

99,116,428

63,513,937

9,623,056

73,136,993

-

-

-

162,630,365

9,623,056

172,253,421

-

-

-


Customer Deposits

Other Liabilities

At 31 December 2014





Operational RiskOperational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events. It is the risk of loss arising from the potential that inadequate information systems, breaches of internal controls, fraud, technological failure and unforeseen catastrophes may result in unexpected loss or reputational problems.

Over the past years the Institution has developed a thorough and consistent framework and policies to control and actively manage its operational risk. The Institution’s framework is aligned with Bank of Ghana’s regulatory requirements.

Compliance and Regulatory Risk In order to strengthen the Institution’s compliance with regulatory requirements, the Institution organises series of dedicated training on a regular basis to equip sta� with compliance and regulatory issues in order to minimise risk emanating there from.

Legal RiskThe Institution is not dependent on any patent or any industrial, commercial or �nancial contract. The Institution’s activities are undertaken in a manner which adequately reduces the Risks which may arise out of material litigation to be initiated against it (the Institution).

Reputational RiskThe Institution conducts its business in a responsible, professional and transparent way. By o�ering simpli�ed products and following the necessary legal and regulatory processes, the Institution safeguards the interest of its clients as well as its reputation. Furthermore, the Institution maintains close ties with the communities in which it operates by supporting them in various ways. This is aimed at demonstrating our commitment and fostering a long term relationship with our clients and the public at large. We manage our image and reputation in a professional manner.

Capital ManagementThe primary objectives of the Institution’s capital management are to ensure that the Institution complies with externally imposed capital requirement by the Bank of Ghana and that the Institution maintains strong credit ratings and healthy capital ratios in order to support its business and maximise shareholders’ value. In order to maintain the desired level of capital, the Institution may vary its dividend policy or issue new shares. The Institution complied with all externally imposed capital requirement throughout the period.

Capital adequacy and use of regulatory capital are monitored regularly by management, employing techniques based on the guidelines developed by the Basel Committee, as implemented by the Bank of Ghana for supervisory purposes. The required information is �led with Bank of Ghana on a monthly basis.

Bank of Ghana requires each non-bank �nancial institution to: (a) hold the minimum level of regulatory capital of GH¢7 million; (b) maintain a ratio of total regulatory capital to the risk-weighted assets plus risk-weighted o�-balance sheet assets (the ‘Basel ratio’) at or above the required minimum of 10%.

30.

e.

f.

g.

h.

i.




Tier 1 Capital

Share capital

Disclosed reserve

Tier 1 Capital

Less:

Intangibles

Net Tier 1 Capital

Total assets (less Contra items)

Less:

Cash on hand

Claims on Bank of Ghana (Bills and bonds)

Invests in the capital of other banks and �nancial institutions

80% of claims on other banks (cedis/forex)

Adjusted Total Assets

Add:

100% of 3 years average annual gross income

Adjusted Asset Base

Adjusted capital base as percentage of adjusted asset base

Capital Surplus/ De�cit

49,861,981

21,071,764

70,933,745

-

70,933,745

328,406,117

8,594,621

125,250,343

194,561,153

36,096,560

230,657,713

30.75%

47,867,974

17,490,981

12,830,863

30,321,844

-

30,321,844

203,672,325

4,823,262

-

-

61,257,192

137,591,871

25,476,189

163,068,060

18.59%

14,015,038

2015GH¢

2014GH¢

The table below summarises the composition of regulatory capital and the ratios at 31 December:

Corporate Social ResponsibilityAmount spent on ful�lling Social Responsibility obligations during the year was GH¢ 155,571(2014: GH¢ 58,086)

Event after the Reporting PeriodNo signi�cant event occurred after the end of the reporting date which is likely to a�ect these �nancial statements.

31.

32.




Sta� CostsSta� Salaries and BonusSta� AllowancesSocial Security CostMedical ExpensesOther Sta� Cost Training Expenses

Other Operating CostsRent, rates and taxesMaintenance of plant /machineryElectricity and waterPostage and telephonePrinting and stationeryInsuranceSecurity costRepairs & maintenance- o�ce equipmentRepairs -furniture & �ttingsCash shortagesMarketing, publicity and advertsSpecie movementProfessional FeesNewspaper & publicationRefreshment & beveragesCleaning and sanitationSubscription and fees WagesBusiness promotionLicenses and registrationLoan recovery expensesRepairs and maintenance - motor vehiclesRenewals and maintenanceComputer and accessoriesFraud investigationTravelling and transportSME loans insurance premiumMaterials and suppliesSundry/other expensesCashier e�ciency allowanceDonationDirectors FeesAudit FeesBank chargesGlobus Maintenance chargesInternet, WanPassbook & ChequesSusu CommissionFuel expensesLegal expensesOutsources ServiceCalendars & DairiesCommunicationDirectors Other expensesSMS Alert ChargesAudit expensesElectricity ExpenseFuel & LubricantGenerator Running ExpensesDepreciation

Total

14,325,5231,422,1152,691,692

511,4713,542,963

279,59622,773,360

900,552105,588

78,34275,196

533,566227,199633,299

69,4942,783

-1,194,545

17,77880,80038,443

217,607545,196270,616212,867227,320

55,05122,210

173,199362,164

27,4711,520

3,548,95414,967

832,63729,365

-155,571

79,86060,00038,454

122,29896,293

6,414190,775

1,340,95886,167

253,60756,495

398,67146,84010,53921,066

662,914287,833733,614

1,608,08616,756,419

39,528,544

11,243,5403,928,2061,927,945

-1,510,844 -

18,610,535

761,058760,126603,386264,893355,490150,836480,480191,541

5,8701,355

547,29419,364

519,35719,676

181,269309,437624,478

77,830183,065142,850

45,119119,632102,786

16,3822,000

1,757,38325,39540,60011,59115,35058,086

108,40045,00034,474

---------------

2,408,82710,990,680

29,601,215

2014GH¢

2015GH¢Operating expenses




uniCredit Ghana Limited(Savings and Loans Company)No.3 North Ridge Lane, North Ridge, AccraP. O. Box GP 18729, AccraTel: +233 302 666648, 672690 Fax: +233 302 672691Enquiries: 0277 762005/ 0277766072

Toll Free: 0800 - 218210

AdabrakaTel: +233 302 260081-3

AgbogbloshieTel: +233 302 688438

ApenkwaTel: +233 302 974446/954032

AshaimanTel: +233 0342290859

Dome Tel: +233 302 901653-8

Kaneshie Tel: +233 302 976356

Kantamanto Tel: +233 302 684737, 960681

Kantamanto CentralTel: +233 302 631210 / 4

KejetiaTel: +233 509 038331-3

MakolaTel: +233 302 660196 / 7

Suame MagazineTel: +233 501 297948-50

Amanful - TakoradiTel: +233 312 032104/63

Tafo- KumasiTel: +233 0322 0 48701- 4

Dr. Mensah - KumasiTel: +233 322 397772

Ridge BranchTel: +233 302 201600

KokomlemleTel: +233 50 1451557/9

KasoaTel: +233 50 1451556

NimaTel: +233 302 201173 / 83 / 96

Opening Soon- Abossey Okai- Nungua- Koforidua- Madina- Techiman- Tamale- Okaishie- Mamprobi Plaza- Tema

Contact: Branches:

uniCredit Ghana LimiteduniCredit Ghana Ltd.uniCreditghana Ltd.