BANK OF ABYSSINIA S.C.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2004
The principal accounting policies adopted by the Bank are stated below:-
a) Tangible fixed assets are stated at cost or valuation, less depreciation. In earlier years, such depreciation had been consistently calculated on the straight-line method. A new Income Tax Proclamation came into force, effective 8 July 2002. Accordingly, depreciation is calculated on the straight-line basis for premises in respect of the current and immediately preceding year. For other assets, depreciation is calculated using a system of pooling for specified group of assets. The rates per annum are as follows:
|
|
|
|
|
|
% |
|
|
Premises |
5 |
|
Computers |
25 |
|
Other assets: |
20 |
|
|
-Vehicles |
|
|
|
-Furniture & fittings |
|
|
|
-Equipment |
|
|
b) Provision for loans and advances are maintained on the basis of directives from the National Bank of Ethiopia (SBB/32/2002). For 30 June 2004 accounts, these Directives permitted a deduction of estimated “net recoverable value” of the physical collateral backing the non-performing loan. The Directive also required all outstanding loans be categorized as follows and provisions calculated using the rates given. During the current year, 100% of the provisions so calculated are to be held in respect of all categories. In 2003, only 85% were required in respect of the non-performing loans (substandard, doubtful and loss):
|
|
% Provision |
|
|
Category |
2004 |
2003 |
|
|
|
|
Pass |
1.00 |
0.75 |
|
Special mention (30-90 days) |
3.00 |
2.00 |
|
Substandard (90-180 days) |
20.00 |
25.00 |
|
Doubtful (180-360 days) |
50.00 |
50.00 |
|
Loss (>360 days) |
100.00 |
100.00 |
|
|
|
|
c) Accrued interest income on non-performing loans are calculated but rendered with non-accrual status (kept in memorandum account) and accounted for in the basic financial statements only on collection.
d) Transactions in foreign currencies are translated into Birr at the exchange rates ruling on the dates such transactions are taking place. Foreign currency cash and bank balances at the end of each day are translated at the buying exchange rates ruling on that date. Any gains or losses are taken to the profit and loss account.
e) Deferred costs (intangibles) are being amortized over 5 years in line with the Directive of the National Bank of Ethiopia No.SBB/18/96.
f) The Bank does not accrue for bonus and compensation for service of staff members but accounted for these as and when paid.
g) Customers’ and Bank’s liabilities on letters of credit are stated at the full values of the commitments without regard to the margins already paid.
h) The rate of earnings per share is the return per share computed on the basis of the average number of shares held during the year taking net profit after tax.
2. DEPOSITS & PREPAYMENTS
|
|
|
2003 |
|
|
Birr |
Birr |
|
|
|
|
|
Prepaid rent |
3,423,346 |
1,894,682 |
|
Deposit for rent |
2,035,952 |
2,035,952 |
|
|
|
|
|
|
5,459,298 |
3,930,634 |
|
|
|
|
3. LOANS AND ADVANCES TO CUSTOMERS
|
|
|
2003 |
|
|
Birr |
Birr |
|
|
|
|
|
Domestic trade & services |
217,939,051 |
283,113,431 |
|
Import |
192,288,122 |
102,396,056 |
|
Transport |
97,717,924 |
114,592,655 |
|
Construction |
95,644,488 |
52,099,812 |
|
Export |
95,415,324 |
38,996,306 |
|
Loans in legal department |
93,180,428 |
90,279,656 |
|
Industry |
57,344,541 |
54,220,521 |
|
Merchandize |
49,691,738 |
15,602,263 |
|
Advance against import bills |
48,993,338 |
47,271,856 |
|
Advance against export bills |
7,132,909 |
3,009,357 |
|
Personal |
4,497,343 |
4,800,671 |
|
Agriculture |
2,551,978 |
2,827,721 |
|
|
962,397,184 |
809,210,305 |
|
Less: Provision for doubtful a/cs |
(73,023,911) |
(62,052,466) |
|
|
|
|
|
|
889,373,273 |
747,157,839 |
6. INTANGIBLES (DEFERRED ESTABLISHMENT COSTS)
|
|
Opening |
|
Closing |
|
|
Balance |
Additions |
Balance |
|
|
Birr |
Birr |
Birr |
|
|
|
|
|
|
These are made up of:- |
|
|
|
|
|
|
|
|
|
Costs |
|
|
|
|
-Acquisition of use right of property |
|
|
|
|
(BOA’s prospective branch) |
1,009,118 |
821,562 |
1,830,680 |
|
-Leasehold land |
799,736 |
59,118 |
858,854 |
|
|
1,808,854 |
880,680 |
2,689,534 |
|
|
|
|
|
|
Amortization |
|
|
|
|
-Acquisition of use right of property |
605,471 |
366,136 |
971,607 |
|
-Leasehold land |
48,198 |
14,739 |
62,937 |
|
|
653,669 |
380,875 |
1,034,544 |
|
|
|
|
|
|
Net Book Value |
1,155,185 |
|
1,654,990 |
|
|
|
|
|
7. TANGIBLES (FIXED ASSETS)
|
|
Opening |
|
Closing |
|
|
Balance |
Additions |
Balance |
|
|
Birr |
Birr |
Birr |
|
|
|
|
|
|
COST |
|
|
|
|
Buildings |
533,298 |
0 |
533,298 |
|
Motor vehicles |
5,235,498 |
260,254 |
5,495,752 |
|
Office & other equip. |
4,938,476 |
984,958 |
5,923,434 |
|
Furniture & fittings |
7,080,864 |
1,358,272 |
8,439,136 |
Acquired properties |
1,323,994 |
5,247,863 |
6,571,857 |
Construction in progress |
318,253 |
0 |
318,253 |
|
|
19,430,383 |
7,851,347 |
27,281,730 |
|
|
|
|
|
|
DEPRECIATION |
|
|
|
|
Buildings |
26,665 |
26,665 |
53,330 |
|
Motor vehicles |
3,166,197 |
465,911 |
3,632,108 |
|
Office & other equip. |
1,946,782 |
913,890 |
2,860,672 |
|
Furniture & fittings |
2,744,056 |
1,139,016 |
3,883,072 |
|
|
7,883,700 |
2,545,482 |
10,429,182 |
|
|
|
|
|
|
NET BOOK VALUE |
11,546,683 |
|
16,852,548 |
|
|
|
|
|
8. DEPOSITS
|
|
|
|
|
|
2003 |
|
|
DEMAND |
SAVINGS |
FIXED TIME |
TOTAL |
TOTAL |
|
Birr |
Birr |
Birr |
Birr |
Birr |
|
|
|
|
|
|
|
|
|
Private sector |
181,243,963 |
872,806,239 |
67,483,751 |
1,121,533,953 |
966,560,754 |
|
Co-operatives & associa. |
14,673,661 |
57,535,820 |
3,118,821 |
75,328,302 |
24,538,105 |
|
Domestic fin.inst. |
2,136,137 |
1,331,032 |
44,632,299 |
48,099,468 |
52,061,543 |
|
NR-transferable Birr a/c |
15,140,779 |
0 |
0 |
15,140,779 |
15,208,254 |
|
Public agencies & enterp. |
5,883,914 |
5,009,492 |
264,983 |
11,158,389 |
14,883,701 |
|
NR-non transferable a/c |
3,539,083 |
0 |
0 |
3,539,083 |
1,999,202 |
|
NR-foreign currency a/c |
255,854 |
0 |
0 |
255,854 |
667,718 |
|
Residents |
138,573 |
0 |
0 |
138,573 |
251,037 |
|
|
|
|
|
|
|
|
223,011,964 |
|