Annual Report
2014 Taarifa ya Mwaka
www.maendeleobank.co.tz 1
Annual Report
2014 Taarifa ya Mwaka
Maendeleo Bank
Maendeleo Bank 2014 Financial Highlights Dondoo za Fedha Assets | Rasilimali
25,000 20,000 15,000
Actual | Halisi Budget | Makadirio
10,000 5,000 0.00 Q4, 2013
Q1, 2014
Q2, 2014
Q3, 2014
Q4, 2014
Deposits | Amana
18.00 16.00 14.00 12.00
Actual | Halisi
10.00
Budget | Makadirio
8.00 6.00
hhh
4.00 2.00 0.00
9
Q4, 2013
Q1, 2014
Q2, 2014
Q3, 2014
Q4, 2014
Loans & Advances | Mikopo na Karadha
8 7 6 Actual | Halisi
5
Budget | Makadirio
4 3 2 1 0
Q4, 2013
Q1, 2014
Q2, 2014
Q3, 2014
Q4, 2014
Profit & Loss | Faida na Hasara 0.00
Q4, 2013
(0.20) (0.40) (0.60) (0.80) (1.00) (1.20) (1.40)
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Annual Report 2014 Taarifa ya Mwaka
Q1, 2014
Q2, 2014
Q3, 2014
Q4, 2014
Actual | Halisi Budget | Makadirio
Maendeleo Bank
Contents Yaliyomo • A : Corporate Information: Title
Page
• A : Taarifa Muhimu:
Ukurasa
1. .
Bank Information
2
Taarifa ya Benki
2. .
History & Ownership Of The Bank
4
Historia na umiliki wa Benki
3. .
Vision, Mission & Values
6
Dira, Dhima na Maadili
4. .
Corporate Governance
9
Utawala Bora
5. .
Corporate Social Responsibility
11
Wajibu kwa Jamii
6. .
Board of Director’s Composition
13
Muundo wa Bodi ya Wakurugenzi
7. .
Chairman’s Statement
22
Ujumbe wa Mwenyekiti
8. .
Senior Management Profile
26
Uongozi wa Juu
9. .
Managing Director’s Report
28
Ripoti ya Mkurugenzi Mtendaji
Maendeleo Bank News
36
Taarifa mbalimbali za Maendeleo Bank
10. .
• B : Financial Statement 11. 12. 13. 14. 15. 16. 17. .
Board of Directors’ Report
39
Statement of Directors` responsibilities in respect of financial statements
50
Independent auditor`s report on the financial statements
51
Statement of financial position
53
Statement of profit or loss and other comprehensive income
54
Statement of changes in equity
55
Statement of cash flows
56
Notes to the financial statements
57
Annual Report 2014 Taarifa ya Mwaka
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Maendeleo Bank
Bank Information Taarifa ya Benki
Maendeleo Bank Plc. Head Office, Luther House Sokoine Drive Dar es Salaam - Tanzania
Maendeleo Bank Plc. Makao Makuu, Luther House mtaa wa Sokoine Dar es Salaam - Tanzania
Maendeleo Bank 2014 Summary of Perfomance Muhtasari wa Utendaji wa Maendeleo Bank 2014 ( TZS IN BILLION ) SUMMARY OF PERFOMANCE 2014
INCOME
DEPOSITS
TOTAL ASSETS
LOANS & ADVANCES
P&L
ACTUAL
1.51
15.82
19.71
7.65
(0.28)
BUDGET
1.37
7.16
10.47
6.29
(1.22)
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Annual Report 2014 Taarifa ya Mwaka
Maendeleo Bank
Bank Information Taarifa ya Benki
Registered Office: Maendeleo Bank PLC Luther House Sokoine Drive PO Box 216 Dar es Salaam Tanzania
Company Lawyers: BM Attorneys 1st Floor Canton Building 5thFloor PO Box 4681 Dar es Salaam Tanzania
Main Bankers: CRDB Bank PLC Mbagala Branch PO Box 700134 Dar es Salaam Tanzania
Bwana Attorneys ITS Building PO Box 20437 Dar es Salaam Tanzania
Bank of Africa NDC Branch PO Box 3054 Dar es Salaam Tanzania Correspondent Bank: Diamond Trust Bank Main Branch PO Box 1115 Dar es Salaam Tanzania
Nominated Advisors CORE Securities Limited 4th Floor Elite City Building PO Box 76800 Dar es Salaam Tanzania
Contact Details: Maendeleo Bank PLC P. O. Box 216 Dar es Salaam Tanzania Tel: +255 22 2110518 Fax: +255 22 211 0595 Email: info@maendeleobank.co.tz Website: www.maendeleobank.co.tz, Money Transfer Services: 1. Local Transfer through TISS 2. International Transfer through SWIFT Code No. MBTLTZTZ 3. Western Union For more details on how to transfer please visit our branch.
Auditors: INNOVEX Auditors Certified Public Accountants 19 Kilimani Road, Ada Estate Kinondoni PO Box 75297 Dar es Salaam Tanzania
Annual Report 2014 Taarifa ya Mwaka
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Maendeleo Bank
History & Ownership of the Bank Historia na Umiliki wa Benki
M
aendeleo Bank Plc started as a result of the strategical decision made during the Annual General Meeting of the Evangelical Lutheran Church of Tanzania – Eastern and Coastal Diocese in 2008 where it was decided to establish a bank and the General Council of the Diocese was directed to proceed with the establishment of the proposed bank. General Council promptly proceeded to form a steering committee made up of seasoned bankers and men of business and public integrity, who proceeded to appoint a professional consultant to prepare the necessary feasibility study and business plan.
Board of Directors | Bodi ya Wakurugenzi
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Annual Report 2014 Taarifa ya Mwaka
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aendeleo Bank Plc ilianza kutokana na uamuzi wa kimkakati uliofanywa katika Mkutano Mkuu wa Mwaka 2008 wa Kanisa la Kiinjili la Kilutheri Tanzania - Dayosisi ya Mashariki na Pwani. Kupitia kikao hicho iliamuliwa kuanzishwa kwa benki na Halmashauri Kuu ya Dayosisi ilipewa jukumu la kuendelea na uanzishwaji wa benki pendekezwa. Halmashauri Kuu mara moja iliendelea kuunda kamati iliyoundwa na wajumbe waliobobea na wataalam katika biashara na uadilifu kwa umma. Ili kuwezesha azma ya uanzishwaji wa Benki kutimia Kamati waliteua mshauri mtaalamu ili kuandaa upembuzi yakinifu na mpango biashara.
Maendeleo Bank
In order to raise enough capital, the bank was approved by Capital Market and Securities Authority (CMSA) to issue shares through IPO and the required capital to start the bank was obtained. In September 2013 the bank was established after obtaining a banking license from the Bank of Tanzania. The bank is now owned by over 3,000 Tanzanians regardless of their faith and origination through sale of shares.
Ili kupata mtaji wa kutosha, benki ilikubaliwa na Mamlaka ya Soko la Mitaji na Amana (CMSA) kuuza hisa kupitia toleo la awali la hisa (IPO) na mtaji uliokusudiwa kuanzisha benki ulipatikana. Mnamo Septemba 2013 benki ilianzishwa baada ya kupata leseni kutoka Benki Kuu ya Tanzania. Benki sasa inamilikiwa na zaidi ya Watanzania 3,000 bila kujali imani au asili zao kwa njia ya mauzo ya hisa.
On 5th November 2013 the Bank was listed on the Dar es Salaam Stock Exchange (DSE) through Enterprise Growth Market (EGM) window. The EGM allows qualifying small entrepreneurs and companies to get startup capital by going through the Dar es Salaam Stock Exchange.
Tarehe 5 Novemba 2013 kupitia dirisha la Ukuaji wa Soko la Biashara (EGM) Benki ilisajiliwa rasmi katika Soko la Hisa la Dar es Salaam ( DSE ). Dirisha la Soko la Ukuzaji wa Biashara linaruhusu wajasiriamali na makampuni yanayokidhi vigezo vinavyotakiwa kupata mitaji ya awali kupitia Soko la Hisa la Dar es Salaam.
Maendeleo Bank became the first product of EGM after putting the 8.0mn shares at Tshs. 500 each on IPO with a green-shoe option. During the IPO our prospective investors read the prospectus and found the bank to be diverse and with a very bright future, hence the capital needed was collected over and above the targeted capital through the IPO. Maendeleo Bank’s target markets are SACCOS, small and medium sized entrepreneurs, companies, social enterprises such as schools, churches, mosques, universities and corporations. Maendeleo Bank serves the needs of growing companies, middle-markets and large corporations, institutional investors, financial institutions and Government entities. The broader goal of the bank is to provide banking services to the emerging Tanzanian businesses with affordable interest rates to enable the businesses and financially disadvantaged people in the country to access financial services. Our business model is characterized by affordability, accessibility and flexibility. The bank’s strength lies on humility, courage, and passionately caring for our communities across the country. Maendeleo Bank has one branch located in Dar es Salaam, Sokoine Drive (Luther House).
Maendeleo Bank ilikuwa Kampuni ya kwanza kusajiliwa kupitia EGM baada ya kuweka hisa 8.0 mn kwa sh. 500 kila moja kwenye toleo la awali la hisa (IPO). Wakati wa toleo hilo wawekezaji tazamiwa walisoma waraka wa matazamio ya uwekezaji na kutambua malengo ya benki yaliyo makubwa hivyo kupelekea mtaji tarajiwa kupatikana na hata kuvuka lengo kupitia toleo hilo la awali. Maendeleo Bank imelenga makundi yafuatayo: Watu binafsi, SACCOs, wajasiriamali wadogo wadogo na wa kati , makampuni , taasisi za kijamii kama shule, makanisa, misikiti, vyuo vikuu na mashirika. Maendeleo Bank inahudumia mahitaji ya makampuni yanayokua, soko la kati na mashirika makubwa, taasisi za uwekezaji, taasisi za fedha na vyombo vya serikali. Lengo kubwa la Maendeleo Bank ni kutoa huduma za kibenki kwa biashara zinazoanza kwa gharama nafuu ili kuziwezesha biashara na Wananchi wote kupata huduma za kibenki. Mfumo wa biashara wa Maendeleo Bank unaundwa na nia thabiti ya kurahisisha, kuongeza upatikanaji na ubunifu wa huduma za kibenki. Nguvu ya Benki yetu inajengwa na unyenyekevu, ujasiri, kujali na kutunza jamii zetu nchini kote. Maendeleo Bank ina tawi moja lililopo jijini Dar es Salaam, Mtaa wa Sokoine (Luther House) .
Annual Report 2014 Taarifa ya Mwaka
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Maendeleo Bank
History & Ownership of the Bank | Historia na Umiliki wa Benki
Shareholders of The Bank The following are the shareholders of the Bank:
Share Holder Mwanahisa
Wanahisa wa Benki Ifuatayo ni orodha ya wanahisa wa Benki
No. of Shares Idadi ya Hisa
% of total share Asilimia ya umiliki
United Evangelical Mission
1,445,551
16.01
Diocese Institutions
1,121,408
12.42
ELCT- Eastern and Costal Diocese
850,000
9.41
Bw. Hans Macha
256,000
2.83
COMPANIES & SACCOS
217,000
Other Individuals
5,139,097
56.93
Total/Jumla
9,029,056
100
2.40
Vision, Mission & Core Values Dira, Dhima na Maadili Vision “To become the premier bank in Tanzania, which is customer need driven with competitive returns to shareholders”. All Maendeleo Bank employees will help accomplish this Vision by always: • Providing unparalleled personal service. • Proactively tailoring innovative banking solutions to fully meet each of our customers’ individual needs. • Treating customers and colleagues with respect. • Being accountable to customers and colleagues in all we do.
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Annual Report 2014 Taarifa ya Mwaka
Dira “Kuwa benki inayoongoza nchini Tanzania ambayo inaendeshwa na mahitaji ya wateja pamoja na malipo ya ushindani kwa wanahisa “. Wafanyakazi wote wa Maendeleo Bank watasaidia daima kuifikia Dira hii kwa: • Kutoa huduma pasipo ubaguzi. • Kutoa masuluhisho ya kibunifu ya kibenki ili kukidhi mahitaji ya wateja wetu. • Kuheshimu wateja na wafanyakazi. • Kuwajibika kwa wateja na wafanyakazi katika utendaji wetu.
Maendeleo Bank
Vision, Mission & Core Values | Dira, Azma na Maadili
Mission “To grow our business whilst investing on communities that we serve and improving the lives of our employees. We strive to provide competitive and innovative financial services to all stake holders and the society”.
Dhima “Kukuza biashara yetu huku tukiwekeza kwa jamii tunayoihudumia na kuboresha maisha ya wafanyakazi wetu. Tunajizatiti kutoa huduma za kifedha zenye ushindani na ubunifu kwa wadau wote na jamii”.
Core Values | Maadili
ACCOUNTABILITY: ”We are accountable for our own actions and decisions”
RESPECT FOR THE INDIVIDUAL:
CARING FOR COMMUNITY: “We are responsive to our community in which we operate”
“We value diversity and unique contributions”
OUR CORPORATE VALUES
INTEGRITY:
EMPOWERMENT:
“We act with honesty and honor without compromising the truth”.
“We encourage our employees to be innovative and use their skills for the benefit of the Bank”.
INNOVATION: “We are skilled, competent and innovative. We create new ways of life to our customers”
Annual Report 2014 Taarifa ya Mwaka
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Maendeleo Bank
Benki Mkononi mwako
MB Mobile Benki mkononi mwako MB MOBILE INAKUWEZESHA:
Kujua salio kwenye akaunti yako Kuhamisha fedha toka kwenye akaunti yako Kununua Luku Kuangalia taarifa fupi ya fedha Kupata taarifa ya miamala yako 8
Annual Report 2014 Taarifa ya Mwaka
www.maendeleobank.co.tz
Maendeleo Bank
Corporate Governance Utawala Bora
T
he Board takes overall responsibility for the Bank, including responsibility for identifying key risk areas, considering and monitoring credit and investment decisions, considering significant financial matters, reviewing the performance of the Management, business plans and budgets. The Board is also responsible for ensuring that a comprehensive system of internal control policies and procedures are operative and compliant with sound corporate governance principles and regulatory requirements. The Board of Directors is comprised of eight Directors. The Directors are required to serve for a minimum period of three years and their renewal will be subject to the reappointment by the shareholders through the Annual General Meetings. The Board is required to meet at least four times a year and since the bank’s establishment in September 2013, the Board and its Committees met several times in order to ensure that business setup and the comprehensive system of internal control policies and procedures are sound and working to support the business strategic objectives. Between the years 2013 and 2014, the Board held 11 meetings. The Board delegates the day to day management of the business to the Senior Management Team (EXCOM) comprising the Managing Director and heads of departments. The Management team is invited to attend the Board meetings and the meetings of various Sub-committees of the Board. The Management remains responsible for the effective control of all the Bank’s operational activities and acting as a medium of communication and coordination amongst the various business and operational units of the Bank.
B
odi inasimamia majukumu yote ya Benki, ikiwa ni pamoja na kutambua maeneo hatarishi kibiashara , kuzingatia na kufuatilia mikopo na maamuzi ya kiuwekezaji , kuzingatia mambo muhimu ya kifedha, kupitia utendaji wa mipango ya biashara , utendaji wa Menejimenti na bajeti. Pia Bodi ina wajibu wa kuhakikisha mfumo wa udhibiti wa sera na taratibu za kiutendaji pamoja na kanuni /sheria zilizowekwa. Bodi ya Wakurugenzi ina Wakurugenzi wanane. Wakurugenzi wanatakiwa kutumikia kwa kipindi cha miaka mitatu na kuendelea kwao kutategemea uteuzi wa wanahisa kupitia Mkutano Mkuu wa Mwaka. Bodi inatakiwa kukutana angalau mara nne kwa Mwaka na tangu kuanzishwa kwa benki mnamo Septemba 2013, Bodi na Kamati zake zilikutana mara kadhaa ili kuhakikisha kwamba muundo wa biashara na mfumo wa sera ya udhibiti na taratibu ni bora na kufanya kazi kuwezesha kufikia malengo mkakati wa biashara. Kati ya mwaka 2013 na 2014, Bodi ilifanya mikutano 11. Bodi imekasimisha kwa timu ya uongozi wa juu wa Benki jukumu la usimamizi wa kazi za kila siku kupitia (EXCOM) inayojumuisha Mkurugenzi Mtendaji na wakuu wa idara. Timu ya Menejimenti inaalikwa kuhudhuria mikutano ya Bodi na mikutano mbalimbali ya kamati ndogo za Bodi. Menejimenti inawajibika kudhibiti ufanisi wa shughuli zote za uendeshaji wa Benki na kutumika kama chombo cha mawasiliano na uratibu baina ya biashara mbalimbali na vitengo vya uendeshaji wa Benki.
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Maendeleo Bank
Corporate Governance | Utawala Bora
The Bank is committed to the principles of effective corporate governance. The Directors also recognize the importance of integrity, transparency and accountability. The Board has two committees to ensure a high standard of corporate governance. All committees reports to the Board. Between the years 2013 and 2014 the Credit committee met 6 times while Audit and Risk Committee met 5 times.
Benki imedhamiria katika kanuni za utawala bora. Wakurugenzi pia wanatambua umuhimu wa uadilifu, uwazi na uwajibikaji. Bodi ina kamati mbili kuhakikisha kiwango cha juu cha utawala bora wa kampuni. Kamati zote za benki zinaripoti kwa Bodi. Kati ya miaka 2013 na 2014 kamati ya Mikopo ilikutana mara 6 wakati Kamati ya Ukaguzi na Athari ilikutana mara 5.
(i) Board of Directors/ Bodi ya Wakurugenzi AGE /UMRI
NATIONALITY /URAIA
QUALIFICATION /WASIFU
Chairman
65
Tanzanian
B. A (Economics)
Mrs. Dosca Mutabuzi
Vice Chairperson
57
Tanzanian
LLB, MBA, Advocate of High Court
Amb. Richard Mariki
Director
71
Tanzanian
Bachelor of Arts, MSC (Management)
Mr. Naftal Nsemwa
Director
68
Tanzanian
B. A (Economics, PGD in Projects Analysis.
Rev. Ernest Kadiva
Director
48
Tanzanian
B’com (Marketing), Bachelor of Divinity, Masters of Theology.
Mr. Felix Mlaki
Director
41
Tanzanian
B. A (Economics, MBA - Finance)
Mrs. Anna Mzinga
Director
38
Tanzanian
(Advanced Diploma in Accountancy, CPA (T), MBA – Finance)
46
Tanzanian
B’Com (Marketing), MBA (Finance), Associateship Diploma in Banking.
NAME /JINA
POSITION /WADHIFA
Mr. Amulike Ngeliama
Mr. Ibrahim Mwangalaba Executive Director
(ii) Audit and Risk Committee (BARC):/Kamati ya Ukaguzi na Athari NAME/ JINA
POSITION/WADHIFA
Mr. Naftal Nsemwa
Chairman
Mr. Felix Mlaki
Member
Mrs. Anna Mzinga
Member
Mr. Ibrahim Mwangalaba
Member
(iii) Credit Committee (BCC):/Kamati ya Mikopo NAME/JINA
POSITION/WADHIFA
Amb. Richard Mariki
Chairman
Mr. Naftal Nsemwa
Member
Mr. Ibrahim Mwangalaba
Member
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Annual Report 2014 Taarifa ya Mwaka
Maendeleo Bank
Corporate Social Responsibilities Wajibu kwa Jamii
M
aendeleo Bank thrives on fostering passionate, curious learners who will in future be our employees and customers. Among Tanzania’s foremost corporate citizens, we are committed to operating in a manner that is economically, socially and environmentally sustainable while balancing the interest of our various stakeholders. Maendeleo Bank is making a positive contribution to the community through our education, health and the disadvantaged support efforts. Better life is what we’re fostering as we focus our resources and efforts to positively impact our communities, employees and stakeholders. We create a better future by extending our legacy and commitment to education and health.
Maendeleo Bank Managing Director Mr. Ibrahim Mwangalaba handing over the bedsheets to Dar es salaam Regional Commisioner. Looking on are the Temeke Hospital senior Medical Officer and Staff.
M
aendeleo Bank inafanikisha ukuzaji wa vijana wenye tija na kiu ya kujifunza ambao watakuwa wafanyakazi na wateja wetu hapo baadae. Tukiwa miongoni mwa wananchi wa Tanzania , tuna nia ya dhati kufanya kazi kwa namna ambayo ni endelevu kiuchumi, kijamii na kimazingira huku tukitekeleza maslahi ya wadau wetu mbalimbali. Maendeleo Bank inatoa mchango chanya kwa jamii kupitia elimu, afya na kusaidia wenye uhitaji. Maisha bora ni kitu tunachokitilia mkazo kwa kuweka rasilimali na juhudi zinazopelekea athari chanya kwa jamii yetu, wafanyakazi pamoja na wadau.Tunatengeza mustakabali wetu wa baadaye kwa kupanua urithi na dhamira yetu katika elimu na afya.
Mr. Ibrahim Mwangalaba listening keenly to the head teacher of Mtoni Diaconic Centre for the handicapped when they visited them to donate special bed covers and other items.
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Maendeleo Bank
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Corporate Social Responsibilities | Wajibu kwa Jamii
Mr. Ibrahim Mwangalaba handing over the mattresses to the Dar es Salaam RC and Temeke Senior Medical Officer.
Maendeleo Bank Staff sharing a light moment with the Students of Mtoni Diaconic Centre for the handicapped when they visited them to donate special bed covers and other items.
Temeke Senior Medical Officer addressing Maendeleo Bank staff, Temeke Medical staff and the Media at the handing over of Bedsheets and Matresses.
Maendeleo Bank staff listening to the Director of Mtoni Diaconic Centre.
Annual Report 2014 Taarifa ya Mwaka
Maendeleo Bank
Board Of Director’s Composition Muundo wa Bodi ya Wakurugenzi
M
r. Amulike Ngeliama has had a long career in banking, business, administration and project management. He began his career in 1976 at TRDB which was later transformed to CRDB, after which he has worked in the banking sector for more than 20 years. He also conducted numerous SACCOS sensitization and mobilization seminars at national and international level. He has worked as Treasurer and Chairman of Mtoni Lutheran Church SACCOS between 1994 and 2013. He is currently a Board member of Oiko credit International and a registered member of IODT.
Mr. Amulike Ngeliama ( Chairman ) B.A Hons-Economics, University of Dar es salaam
B
w. Amulike Ngeliama ana uzoefu mkubwa katika sekta ya benki, usimamizi wa biashara, uandishi na usimamizi wa miradi. Alianza kazi mnamo Mwaka 1976 katika benki ya TRDB ambayo sasa inaitwa CRDB, na baada ya hapo amefanya kazi katika sekta ya benki kwa zaidi ya miaka 20. Pia amekuwa mhamasishaji mashuhuri wa uanzishaji wa SACCOS kitaifa na kimataifa kwa semina nyingi ambazo ameziendesha kwa kusudi hilo. Pia ni mwanachama wa Taasisi ya Wakurugenzi (IODT). Amekuwa Mtunza Hazina na Mwenyekiti wa SACCOS ya Mtoni Lutheran Church toka mwaka 1994 hadi 2013. Pia ni mjumbe wa Bodi ya wakurugenzi ya OIKO credit International.
Bw. Amulike Ngeliama ( Mwenyekiti ) Shahada - Uchumi, Chuo Kikuu cha Dar es salaam
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Maendeleo Bank
Board Of Director’s Composition | Bodi ya Wakurugenzi
M
rs. Dosca Mutabuzi is an Advocate of the High Court of Tanzania and a Notary Public and Commissioner for Oaths. She is the managing partner of Mutabuzi & Co. Advocates. She has also worked as State Attorney Grade III at the Attorney General’s Chambers and at the Tanzania Legal Corporation - DSM She is a member of Tanganyika Law Society (TLS); Tanzania Women Lawyers Association (TAWLA); the East Africa Law Society; and the Eastern & Coastal Diocese Tender Board - ELCT.
Mrs. Dosca Mutabuzi Master of Business Administration (MBA), University of Wales - UK, Bachelor of Laws (Ll. B), University of Dar es salaam.
B
i. Dosca Mutabuzi ni Wakili wa Mahakama Kuu ya Tanzania, Mshauri wa kisheria na Kamishna wa Viapo. Pia ni Mkurugenzi mshirika wa Mutabuzi & Co Advocates. Pia aliwahi kuwa Mwanasheria wa Serikali Daraja la III kwenye Ofisi ya Mwanasheria Mkuu na Shirika la Sheria la Tanzania – Dar es Salaam. Bi. Dosca ni mwanachama wa Tanganyika Law Society (TLS); Chama cha Wanasheria Wanawake Tanzania (TAWLA), Chama cha Wanasheria Afrika Mashariki; na Bodi ya Zabuni ya Dayosisi ya Mashariki na Pwani ( KKKT- DMP ).
Bi Dosca Mutabuzi Shahada ya Uzamili ya Usimamizi wa Biashara, Chuo Kikuu cha Wales - Uingereza, Shahada ya Sheria, Chuo Kikuu cha Dar es salaam ( Ll B).
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Annual Report ya ya Mwaka Annual Report2014 2014Taarifa Taarifa Mwaka
Board Of Director’s Composition | Bodi ya Wakurugenzi
Maendeleo Bank
M
r. Ibrahim Mwangalaba is the Managing Director of the Bank. Before his appointment at Maendeleo Bank PLC, he worked at the KCB Bank Tanzania Ltd as Head of Operations & Technology. He also worked with CRDB and Mbeya Cement Company Limited for over 6 years in each. He holds an associateship diploma in banking of the Tanzania Institute of Bankers and is a Certified Director by the Institute of Directors (Tanzania). He is a professional member of Tanzania Institute of Bankers.
Mr. Ibrahim Mwangalaba ( Managing Director ) Masters in Business Administration (MBA) in Finance, Bachelor of Commerce & Management - both from the University of DSM.
B
w. Ibrahim Mwangalaba ni Mkurugenzi Mtendaji wa Benki. Kabla ya uteuzi wake katika Maendeleo Bank PLC, aliwahi kuwa Mkuu wa Uendeshaji na Teknolojia wa KCB Bank Tanzania Ltd. Pia alifanya kazi CRDB na Mbeya Cement Company Limited kwa zaidi ya miaka 6 katika kila moja. Bw. Mwangalaba ana Stashahada ya benki ya Taasisi ya Mabenki Tanzania na pia amethibitishwa kama Mkurugenzi na Taasisi ya Wakurugenzi (Tanzania). Pia ni mwanachama wa wataalamu wa Taasisi ya Mabenki.
Bw. Ibrahim Mwangalaba ( Mkurugenzi ) Shahada ya Uzamili katika Usimamizi wa Biashara, katika Fedha, Shahada ya Biashara na Usimamizi - zote kutoka Chuo Kikuu cha Dar es Salam.
AnnualReport Report2014 2014Taarifa Taarifa Mwaka Annual yaya Mwaka
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Maendeleo Bank
Board Of Director’s Composition | Bodi ya Wakurugenzi
A
mbassador Richard Mariki is a long serving public servant. Professionally, he has extensive experience and has held senior positions in banking, telecommunications, aviation insurance and the Mining industry. Ambassador Mariki is currently working with the Evangelical Lutheran Church in Tanzania - East and Coastal Diocese as the Church’s General Secretary. Ambassador Mariki has also occupied Board positions as Chairman or member in respected companies and government agencies like the Tanzania Communications Regulating Authority, Economic and Social Research Foundation, National Insurance Corporation, Air Tanzania Corporation, TAZARA, National Bank of Commerce, East African Development Bank and Tanzania Revenue Authority (TRA). He is currently Board member of Geita Gold Mines, the Investment Trust Board of the (ELCT-ECD) and Tumaini University College, Dar es Salaam.
Ambassador Richard Mariki (MSC Management Arthur D. Little Management Institute, Cambridge Mass1978; B.A University of East Africa-Dar es salaam Campus-1969); Certificate in Investment Appraisal and Management (University of Harvard).
B
alozi Richard Mariki ni mtumishi wa umma mzoefu aliyebobea. Amewahi kushika nyadhifa mbalimbali za juu katika benki, mawasiliano ya simu, bima ya anga pamoja na madini. Balozi Mariki sasa ni Katibu Mkuu wa Kanisa la Kiinjili la KilutheriTanzania – Dayosisi yaMashariki na Pwani. Balozi Mariki amehudumu kama Mwenyekiti na mjumbe, kwenye bodi mbalimbali za Serikali na binafsi kama vile Mamlaka ya Mawasiliano Tanzania, Taasisi ya Utafiti waUchumi na Jamii, Shirika la Bima la Taifa,Shirika la NdegeTanzania, TAZARA , Benki ya Taifa ya Biashara (NBC) , Benki ya Maendeleo ya Afrika Mashariki na Mamlaka ya Mapato Tanzania (TRA). Balozi Mariki kwa sasa ni mjumbe wa Bodi ya Geita Gold Mines, Bodi ya Uwekezaji ya (KKKT – Dayosisi ya Mahariki na Pwani) na Chuo Kikuu cha Tumaini, Dar es Salaam.
Balozi Richard Mariki (Shahada ya Uzamili ya Usimamizi toka Arthur D. Little Management Institute, Cambridge Mass 1978, Shahada ya Sanaa Chuo Kikuu cha Afrika Mashariki –Kampasi yaDar es salaam - 1969) , Cheti katika Uwekezaji na Menejimenti (Chuo Kikuu cha Harvard).
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Annual Report ya ya Mwaka Annual Report2014 2014Taarifa Taarifa Mwaka
Board Of Director’s Composition | Bodi ya Wakurugenzi
Maendeleo Bank
M
r. Naftal Nsemwa has worked with national institutions at the highest levels, including that of Director General - PPF Pensions Fund. Before his appointment as DG in PPF, Mr. Nsemwa worked in the Tanzania Investment Bank (TIB) in different capacities including Director of Planning and Development. Mr Nsemwa is currently Board Member of NIKO Insurance Tanzania Limited and Kioo Limited and was a Member of Board of Directors of several institutions and companies. He is a past Chairman of the Azania Bancorp Ltd.’s Board of Directors, Vice Chairman of the Tanzania Re-insurance Ltd. Board of Directors and a member of the Board of Directors of PTA - Reinsurance Ltd - a Regional re-insurance company based in Nairobi, Kenya; He is also the Managing Director of INTERFINi Consultants Limited.
Mr. Naftal Nsemwa Postgraduate Diploma in Project Analysis (Institute of Social Studies, The Hague) ; Bachelor of Arts (Economics) (University of Dar es Salaam).
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w. Naftal Nsemwa amewahi kufanya kazi na taasisi za kitaifa katika ngazi mbalimbali za juu , ikiwa ni pamoja na ile ya Mkurugenzi Mkuu - PPF. Kabla ya uteuzi wake kama Mkurugenzi Mkuu wa PPF, Bw. Nsemwa alifanya kazi katika Benki ya Rasilimali Tanzania (TIB) katika idara tofauti ikiwemo ya Mkurugenzi wa Mipango na Maendeleo. Bw. Nsemwa ni Mjumbe wa Bodi ya Niko Insurance Tanzania Limited na Kioo Limited. Pia aliwahi kuwa Mwenyekiti wa Bodi ya Wakurugenzi ya Azania Bancorp Ltd, Makamu Mwenyekiti wa Bodi ya Wakurugenzi ya Re- insurance Ltd na mjumbe wa Bodi ya Wakurugenzi ya PTA - Reinsurance Ltd, Kampuni ya bima iliyopo Nairobi nchini Kenya. Kwa sasa ni Mkurugenzi Mtendaji wa INTERFINi Consultants Limited.
Bw. Naftal Nsemwa Stashahada ya Uzamili katika Uchambuzi wa Miradi (Taasisi ya Utafiti wa Jamii, Hague); Shahada ya Sanaa (Uchumi) (Chuo Kikuu cha Dar es Salaam).
AnnualReport Report2014 2014Taarifa Taarifa Mwaka Annual yaya Mwaka
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Maendeleo Bank
Board Of Director’s Composition | Bodi ya Wakurugenzi
R
everend Ernest Kadiva is currently working with the Evangelical Lutheran Church in Tanzania - East and Coastal Diocese as the Church’s Deputy General Secretary Administration, Operations and Estate Affairs. He has attended numerous courses and seminars in Church leadership and Management Skills in Singapore at the Haggai Institute; Senior Managers Course in “Governance and Accountability in Tanzania: an Overview of Civil Society” organized by the University of Dar-es-Salaam in 2000. He has written professional papers and research works that were presented in different forum and workshop in Tanzania and overseas.
Reverend Ernest Kadiva Bachelor of Commerce and Management University of Dar-es-Salaam in 1993; Bachelor of Divinity, Makumira University in 2002, Master of Theology and Ecumenical Studies (Geneva University 2011)
M
chungaji Ernest Kadiva anafanya kazi katika Kanisa la Kiinjili la Kilutheri Tanzania - Dayosisi ya Mashariki na Pwani kama Naibu Katibu Mkuu Tawala, Uendeshaji na Miliki. Amehudhuria kozi na semina mbalimbali katika Uongozi wa Kanisa na Stadi za Uongozi nchini Singapore katika Taasisi ya Haggai, Kozi ya Uongozi wa Juu, katika “ Utawala Bora na Uwajibikaji Tanzania : Muhtasari wa Utumishi wa Umma “ iliyoandaliwa na Chuo Kikuu cha Dar -esSalaam mwaka 2000. Mchungaji Kadiva ameandika machapisho mbalimbali ya kitaalamu yaliyotolewa sehemu mbalimbali ndani na na nje ya nchi.
Mchungaji Ernest Kadiva Shahada ya Biashara na Usimamizi - Chuo Kikuu cha Dar -es- Salaam mwaka 1993, Shahada ya Dini , Chuo Kikuu Makumira mwaka 2002 , Shahada ya Uzamili ya Theolojia na Mafunzo ya Ecumenical (Chuo Kikuu Geneva 2011)
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Annual Report ya ya Mwaka Annual Report2014 2014Taarifa Taarifa Mwaka
Board Of Director’s Composition | Bodi ya Wakurugenzi
Maendeleo Bank
M
rs. Anna Mzinga is a professionally qualified accountant with senior-level experience in accounting, finance and project management. She is currently working with Benjamin William Mkapa HIV/AIDS Foundation as Grant and Compliance Manager. Prior to holding that position, she worked with the Higher Education Student Loans Board as Senior Accountant; with Dunduliza Company Limited in partnership with Desjardins International Development as a Director of Finance and worked with the Open University of Tanzania as Assistant Accountant.
Mrs. Anna Mzinga MBA - Finance, Open University of Tanzania (2009); Professional Savings and Credit Societies Management Course, Moshi University College of Cooperatives and Business Studies; Advanced Diploma in Accountancy - Institute of Finance Management (2000); Certified Public Accountant, CPA (T).
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i. Anna Mzinga ni mhasibu mwenye sifa kitaaluma na mwandamizi wa ngazi ya juu katika uhasibu, fedha na usimamizi wa miradi. Kwa sasa anafanya kazi katika Taasisi ya Benjamin William Mkapa HIV/ AIDS Foundation kama Meneja wa Miradi na Uzingatiaji sheria. Kabla ya kushika nafasi hiyo, alifanya kazi katika Bodi ya Mikopo ya Wanafunzi wa Elimu ya Juu kama Mhasibu mwandamizi, amefanya kazi katika kampuni ya Dunduliza kwa kushirikiana na Desjardins International Development kama Mkurugenzi wa Fedha pamoja na Chuo Kikuu Huria cha Tanzania kama Mhasibu Msaidizi.
Bi Anna Mzinga Shahada ya Uzamili ya Usimamizi wa Biashara - Fedha , Chuo Kikuu Huria cha Tanzania (2009) , Kozi ya Kitaalamu ya Usimamizi wa Akiba na Mikopo , Chuo cha Ushirika Moshi na Masomo ya Biashara , Stashahada ya Juu ya Uhasibu - Taasisi ya Usimamizi wa Fedha (2000 ); pia ana cheti cha Uhasibu cha Taifa , CPA (T).
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Maendeleo Bank
Board Of Director’s Composition | Bodi ya Wakurugenzi
M
r. Felix Mlaki is the Executive Director of the Economics & Business Foundation (T) Ltd. Prior to that, he worked at KCB Bank Tanzania Ltd as Head of Retail Banking; and Standard Chartered Bank Tanzania as General Manager Shared Distribution. He has attended various courses and seminars such as Global Banking Services and Product Pricing - India; A Talented Manager - Kenya; Profit Management - USA; International Financial Leadership - USA; Service Excellence - Ghana; Global Wealth Management - UK; Building Value Leadership - Singapore; and Leadership for Growth - Indonesia. He is a member of Tanzania Institute of Bankers and is registered as an International Business Executive.
Mr. Felix Mlaki B.A (Economics, MBA - Finance)
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w. Felix Mlaki ni Mkurugenzi Mtendaji wa Taasisi ya Uchumi na Biashara Tanzania. Kabla ya hapa, alifanya kazi KCB Bank Tanzania Ltd kama Mkuu wa kitengo cha biashara, na Standard Chartered Tanzania kama Meneja Mkuu Usambazaji. Bw. Mlaki amehudhuria kozi mbalimbali na semina kama vile, Huduma za Kibenki Ulimwenguni, Upangaji Bei za Bidhaa - India , Meneja mwenye talanta - Kenya; Usimamizi wa Faida - Amerika; Uongozi wa fedha Kimataifa - Amerika; Ubora wa Huduma - Ghana , Usimamizi waMali Ulimwenguni - Uingereza; Ujenzi wa uwezo katikaUongozi - Singapore , na Uongozi wa Kukuza Uchumi - Indonesia. Bw. Mlaki ni mwanachama wa Taasisi ya Mabenki Tanzania na amesajiliwa kama Mtendaji wa Biashara wa Kimataifa.
Bw. Felix Mlaki Shahada ( Uchumi, Shahada ya Uzamili – Fedha)
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Annual Report ya ya Mwaka Annual Report2014 2014Taarifa Taarifa Mwaka
Board Of Director’s Composition | Bodi ya Wakurugenzi
Maendeleo Bank
Maendeleo Bank Insurance Agency Personal Accident
Group Personal Accident
Kwa watu binafsi Tunatoa bima kwa ajili ya Kifo au Ulemavu uliosababishwa na ajali inayomuhusu mteja wetu
Kwa makundi ya watu Bima hii ni maalum kwa mwaajiriwa pia kwa ajili ya kifo, ulemavu kwa waajiriwa
Annual Report 2013
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Maendeleo Bank
Chairman’s Statement Ujumbe wa Mwenyekiti
O
n behalf of Maendeleo Bank Board of Directors, it is my pleasure to present Maendeleo Bank’s first Annual Report for the year 2013 / 2014. This is a milestone in our endeavor to provide Tanzanian with the opportunity to progress and realize their goals through access to financial services. We recognize the commitment and support offered by the Evangelical Lutheran Church in Tanzania – Eastern and Coastal Diocese, led by the Bishop Dr. Alex Gehaz Malasusa, for their wise decision of establishing the bank. Without this brilliant decision and commitment, Maendeleo Bank could not be in existence.
K
wa niaba ya Bodi ya Wakurugenzi ya Maendeleo Bank, ni furaha yetu kubwa kuwasilisha Ripoti ya Kwanza ya Mwaka ya Benki. Hii ni hatua kubwa katika jitihada zetu za kuwapatia Watanzania fursa ya maendeleo na kufikia malengo yao kupitia upatikanaji wa huduma za kifedha. Tunatambua jitihada na kujitoa kwa Kanisa la Kiinjili la Kilutheri Tanzania - Dayosisi ya Mashariki na Pwani , ikiongozwa na Askofu Dk Alex Gehaz Malasusa , kwa uamuzi wao wa busara wa kuanzisha benki. Bila maono na upeo mkubwa na kujitolea, Maendeleo Bank isingelikuwapo kabisa.
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Annual Report 2014 Taarifa ya Mwaka
Chairman’s Statement | Ujumbe wa mwenyekiti
Maendeleo Bank
On 9th September 2013, Maendeleo Bank started its operations and on 5th November 2013 the bank was listed in the Dar es Salaam Stock Exchange (DSE) whereby its shares were floated through the Enterprise Growth Market (EGM) window . We remain indebted to the public by the trust and belief they have given to the Bank manifested through over subscription of shares by a whooping TZS 4.5 Billion against a target of TZS 4. The IPO resulted in over 3,000 shareholders. Whereas the issuing price was TZS. 500, the current price has risen up to TZS. 600; This is a 20% increase on the IPO prices, showing the confidence which the investors have in the Bank. We extend our appreciation to the Bank of Tanzania, the Capital Markets and Securities Authority and the Dar es Salaam Stock Exchange for their guidance, support and approvals that allowed Maendeleo Bank Plc to open the doors to the public and offer much needed financial services to be accessible to everyone. The journey to open our doors was a massive challenge for the Board, Management and Staff.
Tarehe 5 Novemba 2013, Maendeleo Bank ilisajiliwa katika Soko la Hisa la Dare es Salaam kupitia Dirisha la Ukuaji wa Soko la Biashara (EGM) na ambapo hisa zake zilianza kuuzwa. Tunawiwa deni kwa umma kwa imani ya wazi waliyoionyesha kwa kununua hisa kwa wingi kufikia TZS bilioni 4.5 ikilinganishwa na lengo la awali la TZS bilioni 4.0. Mauzo ya toleo la awali la hisa (IPO) yalipelekea zaidi ya wanahisa 3,000 kupatikana, ambapo bei ya hisa ilikuwa Sh. 500, bei ya sasa imeongezeka hadi Sh. 600; ikiwa ni ongezeko la asilimia 20 la bei za toleo la awali. Hii inaonyesha imani kubwa ambayo wawekezaji wanayo kwa Benki. Tunatanguliza shukrani zetu kwa Benki Kuu ya Tanzania, Mamlaka ya Soko la Mitaji na Amana na Soko la Hisa la Dar es Salaam kwa mwongozo wao, msaada na vibali vilivyopelekea Maendeleo Bank Plc kufungua milango kwa umma na kuanza kutoa huduma za kifedha zenye tija kwa watu wote . Safari ya kufungua milango yetu ilikuwa na changamoto nyingi kwa Bodi, Menejimenti na Wafanyakazi .
Many targets were achieved through great dedication of Staff. They include the introduction of many new products, the hiring and training of staff and creating state of art banking processes. These investments boosted our revenues and, most significantly, created a solid foundation for growth and profitability. In excess of expectations, 2014 Income realized was Tzs. 1.5 billion against a target of Tzs. 1.30 billion deposit with the bank reached 15.80 billion against a budget of Tzs. 7.20 billion, loan figure was Tzs. 7.65 billion against a budgeted figure of Tzs. 6.29 billion. Likewise, loss figure dropped from the budgeted figure of Tzs. 1.22 billion to Tzs. 281.0 million as at 31st December 2014. We are very much satisfied with these results as they indicate a good growth and lay a firm foundation for better performance in years ahead.
Malengo mengi ya benki yalifikiwa kutokana na kujitoa pamoja na juhudi kubwa za Wafanyakazi. Hii inajumuisha uanzishwaji wa huduma nyingi mpya, kuajiri na mafunzo ya wafanyakazi na kujenga taratibu bora za kiutendaji katika benki. Uwekezaji huu ulikuza mapato yetu , na kwa kiasi kikubwa , kuunda msingi imara kwa ajili ya ukuaji wa biashara na ongezeko la faida. Mwaka 2014 Mapato yaliyopatikana yalikuwa ni TZS bilioni 1.5 ikilinganishwa na lengo la TZS bilioni 1.30, hii inavuka lengo lililokusudiwa na hivyo kufikia ziada ya matarajio, amana zilizowekwa katika benki zilifikia bilioni TZS bilioni 15.8 dhidi ya bajeti ya TZS bilioni 7.20, mikopo ilikuwa TZS bilioni 7.65 dhidi ya bajeti iliyopangwa ya TZS bilioni 6.29. Kadhalika, katika mwaka 2014 hasara ilishuka kutoka bajeti iliyotarajiwa ya shilingi TZS bilioni 1.22 hadi TZS milioni 281.0. Tumeridhishwa sana na matokeo haya kwani yanaonyesha ukuaji mzuri na yanajenga msingi imara kwa utendaji bora zaidi katika miaka ijayo.
Inspite of all these successes, some significant challenges remain ahead. Many new innovations were accomplished during the year. Given the growth of customers recorded, Maendeleo Bank is set to expand its flagship by opening additional branches, and introducing more alternative service delivery channels. The bank will also develop and launch complementary new products to meet the demands of specific customer groups. Other focus points in 2015 include reducing waiting time at the branch,
Licha ya mafanikio hayo, baadhi ya changamoto kubwa zinabaki mbele yetu. Ubunifu mpya ulifanyika wa kutosha katika kipindi cha mwaka 2014. Kutokana na ukuaji wa wateja, Maendeleo Bank ina mpango wa kupanua wigo wake kwa kufungua matawi zaidi, na kuanzisha njia mbadala zaidi za utoaji wa huduma. Annual Report 2014 Taarifa ya Mwaka
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Maendeleo Bank
Chairman’s Statement | Ujumbe wa mwenyekiti
creating more convenience through providing access to bank services without necessarily visiting the branch and improving the size and quality of the loan portfolio. Looking back on the achievements of the year under review, I am fully satisfied that we have the Management and Staff that we need to deal with these issues, thereby positioning the bank at a level of success that we want, that is getting the dividends from our investment. We will discuss our achievements, results, strategy and plans in depth at our Annual General Meeting. In 2014, Maendeleo Bank’s efforts were not limited to commercial operations. Maendeleo Bank is strongly committed to developing Tanzania by participating in numerous social activities that aim to support health, education and other sectors that have an impact on needy communities. Maendeleo Bank will continue to allocate funds to support social responsibility in these areas mentioned in the years ahead. In conclusion, I would like to thank all key stakeholders: shareholders, for their support and understanding; customers, for their trust and loyalty; fellow Directors for their commitments and support; Management and Staff, for their dedication and positive attitude to the strategies we are implementing; and the regulators, for their faith and effective guidance. I am proud of what we have achieved together in 2014 and I am confident that, despite market challenges we are facing, we will surf and survive through the furious business waves alongside the seasoned sharks and will improve further in 2015.
Amulike Ngeliama Chairman
Benki pia itaanzisha na kuzindua bidhaa mpya ili kukidhi mahitaji ya vikundi vya wateja maalum. Malengo mengine katika mwaka 2015 ni pamoja na kupunguza muda wa kusubiri huduma tawini, kurahisisha zaidi upatikanaji wa huduma za kibenki bila ulazima wa kutembelea tawi na kuboresha ukubwa na ubora wa mikopo. Nikitazama nyuma juu ya mafanikio ya mwaka uliomalizika, ninaridhika kwamba tuna Menejimenti yenye uzoefu na Wafanyakazi mahiri wanaokabiliana na masuala haya na hivyo kuiweka benki katika ngazi ya mafanikio tunayoyataka, yaani tufikie kupata gawio kutokana na uwekezaji wetu. Tutajadili mafanikio yetu, matokeo, mikakati na mipango kwa kina katika Mkutano wetu Mkuu wa Mwaka. Katika mwaka 2014, juhudi za Maendeleo Bank hazikulenga shughuli za kibiashara pekee. Maendeleo Bank ina nia ya dhati ya kushiriki kuendeleza nchi yetu kupitia shughuli mbalimbali za kijamii zenye lengo la kusaidia afya, elimu na jamii nyingine zenye uhitaji. Maendeleo Bank itaendelea kutenga fedha kwa ajili ya kusaidia jamii kama sehemu ya wajibu wetu kwa jamii katika maeneo hayo. Kwa kumalizia, napenda kuwashukuru wadau wote muhimu : wanahisa, kwa uelewa mkubwa na msaada wao; wateja , kwa imani yao na uaminifu; wakurugenzi wenzangu, kwa kujituma kwao; wafanyakazi, kwa kujitolea kwao na mtazamo chanya kwa mikakati tunayoitekeleza; Menejimenti, kwa dhamira yao bora , na viongozi wa taasisi zinazotusimamia kwa imani na uongozi wao wenye ufanisi. Naonea fahari mafanikio tuliyofikia kwa pamoja katika Mwaka wa 2014 na nina uhakika kwamba, licha ya changamoto tunazokabiliana nazo za soko, tutahimili vishindo vya mawimbi makali yaliyo katika bahari ya biashara iliyozungukwa na waliotutangulia ambao ni wakubwa na wana uzoefu, na ya kuwa tutaboresha zaidi utendaji wetu katika mwaka 2015.
Amulike Ngeliama Mwenyekiti
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Annual Report 2014 Taarifa ya Mwaka
Maendeleo Bank
Maendeleo Junior Account PRODUCT FEATURES Designed for children within the age group 0-18 years Minimum account opening balance Tsh 10,000 or USD. 10 One bankers cheques at no cost cost for each school term Free statements – monthly , quarterly No Monthly Maintenance fee Junior Maendeleo account card with photograph of child and parent Annual Report 2014 Taarifa ya Mwaka
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Maendeleo Bank
Senior Management Profile Uongozi wa juu
Mr. Ibrahim Mwangalaba Managing Director
Mr. George Wandwalo ICT Manager
Mr. Xavery Tumbo Credit Manager
Mr. Ibrahim Mwangalaba is the Managing Director of the bank and before his appointment at Maendeleo Bank PLC; he worked at KCB Bank Tanzania Ltd as Head of Operations & Technology. He has also worked with CRDB and Mbeya Cement Company Limited for over 6 years in each. He holds an associateship diploma in banking of the Tanzania Institute of Bankers and is a Certified Director by the Institute of Directors (Tanzania).
Mr. George Wandwalo He is Microsoft certified system Engineer (MCSE) by Microsoft USA ,BSC in computer science from Norwest University USA,Higher Diploma in Information Technology –Institute of management of information systems –CATS Tanzania, Certificate in Land surveying and photogrammetry-Ardhi Insititute (ARDHI University Dar-Es-Salaam) , He is currently persuing Post Graduate Diploma in Project Management- Tanzania Institute of project Management. Has an experience in construction industry 6 years abroad and locally and 10 years in banking , handling various projects within Tanzania and abroad.
Mr. Xavery Tumbo is the Credit Manager of Maendeleo Bank since its establishment in 2013.He is a degree holder in Accounting and Finance from Mzumbe University. He has experience of over 8 years in credit management in banking. He held various position such as Credit Officer, Senior Credit Officer, Branch Manager and Micro Lending Coordinator (AccessBank Tanzania), Credit Manager, Sales and Marketing Manager –Credit (EFC). He attended various training on credit and risk management locally and internationally.
He is a professional member of Tanzania Institute of Bankers. He holds BCOM in Marketing and MBA in Finance.
Bw. Ibrahim Mwangalaba Mkurugenzi Bw. Ibrahim Mwangalaba ni Mkurugenzi Mtendaji wa benki na kabla ya uteuzi wake Maendeleo Bank PLC, alifanya kazi Benki ya KCB Tanzania Ltd kama Mkuu wa Uendeshaji naTeknolojia. Pia alifanya kazi CRDB na Kampuni ya Saruji ya Mbeya kwa zaidi ya miaka 6 kila moja. Bw.Mwangalaba ana Stashahada ya juu ya benki toka Taasisi ya Mabenki Tanzania na amethibitishwa kama Mkurugenzi na Taasisi ya Wakurugenzi (Tanzania). Bw. Ibrahim ni mwanachama wa wataalamu wa Taasisi ya Mabenki Tanzania. Bw. Ibrahim Mwangalaba (Mkurugenzi) Shahada ya Uzamili katika Usimamizi wa Biashara (Shahada ya Uzamili) katika Fedha, Shahada ya Biashara na Menejimenti - zote kutoka Chuo Kikuu cha Dar es Salam.
Member of institute of management of information system-UK Member of Microsoft Engineers-USA Bw. George Wandwalo Meneja Tehama Bw. George Wandwalo ni mtaalam wa mifumo ya Tehama aliyethibitishwa na Microsoft Amerika, Shahada ya Sayansi katika sayansi ya kompyuta kutoka Chuo Kikuu Norwest Amerika, Stashahada ya juu katika Teknolojia ya Habari -Institute Ya usimamizi wa habari-CATS Tanzania, Cheti cha Upimaji Ardhi na picha Chuo Kikuu cha Ardhi, Sasa anaendelea na masomo ya Stashahada ya juu katika Usimamizi wa Miradi. Ana uzoefu wa miaka 6 katika sekta ya ujenzi na miaka 10 benki akisimamia miradi mbalimbali ndani na nje ya nchi. Bw. George ni mjumbe wa taasisi ya usimamizi wa mfumo wa habari –Uingereza, Mjumbe wa Wahandisi wa Microsoft-Amerika
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Annual Report 2014 Taarifa ya Mwaka
Bw. Xavery Tumbo Meneja Mikopo
Bw. Xavery Tumbo ni Meneja Mikopo wa Maendeleo Bank tangu kuanzishwa kwake Mwaka 2013.Ana Shahada ya Uhasibu na Fedha kutoka Chuo Kikuu Mzumbe. Ana uzoefu wa zaidi ya miaka 8 ya Usimamizi wa mikopo katika benki. Kabla ya kujiunga na Maendeleo Bank alifanya kazi sehemu mbalimbali kama vile Afisa Mikopo, Afisa Mikopo Mwandamizi, Meneja wa Tawi na Mratibu wa Mikopo midogo (Access Bank Tanzania), Meneja Mikopo, Meneja Mauzo na Masoko –Mikopo (EFC). Bw. Tumbo amehudhuria mafunzo mbalimbali ya usimamizi wa mikopo na athari ndani na nje ya nchi.
Maendeleo Bank
Ms. Margaret Msengi Branch Operations Manager
Mr. Damas Lubuva Finance Manager
Mr. Peter Tarimo Internal Audit Manager
Ms. Margaret Msengi has been a Branch Operations Manager for one year ago. She is holding B.Sc. In Computing and Information Systems at London Metropolitan University. Together with broad ranging experience in the banking sector, Microfinance and Software developers industry.
Mr. Peter Tarimo Has been the Internal Audit Manager since the bank establishment in 2013. He is a holder of (C.P.A -T) ,Associate Diploma in Banking, M.Sc. in Supply Chain Management and Procurement from Mzumbe University and B.Sc. in Mathematics and Statistics of the University of Dar es Salaam.
She has over 15 years experience in banking. She held several positions including Credit administrator (Azania Bank), System Administrator (Uchumi Commercial Bank), Support Engineer (Craft Silicon Nairobi), IT Manager (Presidential Trust Fund), Senior Operations Officer (Tanzania Women’s Bank).
Mr. Damas Lubuva has been the Finance Manager since the bank establishment in 2013.He is a Certified Public Accountant (C.P.A) by National Board of Accountants and Auditors (NBAA) and hold Advanced Diploma in Accountancy from Institute of Finance Management (IFM). He has experience a vast experience over 10 years in banking among positions previously held include Chief Internal Auditor (Tanzania Women Bank) and Branch Controller (CRDB Bank PLC), He is a member of Institute of Internal Auditors (IIA) and also a member of National Board of Accountant and Auditors (NBAA).
Bi. Margaret Msengi Meneja Uendeshaji wa Tawi
Bw. Damas Lubuva Meneja Fedha
Bi Margaret Msengi amekuwa Meneja Uendeshaji wa Tawi kwa mwaka mmoja uliopita. Ni muhitimu wa Shahada ya Sayansi katika Tehama na Mifumo ya Teknolojia kutoka chuo cha Metropolitan-Uingereza.Ana uzoefu mkubwa katika sekta ya benki, mikopo midogo midogo na uendelezaji wa mifumo ya mawasiliano.
Bw. Damas Lubuva ni Meneja wa Fedha wa Maendeleo Bank tangu kuanzishwa kwake rasmi Mwaka 2013. Amesajiliwa na Bodi ya Ukaguzi wa hesabu (NBAA) kama “Certified Public Accountant”. na Stashahada ya juu ya Uhasibu kutoka chuo cha Usimamizi wa Fedha (IFM).
Bi Margaret ana uzoefu wa zaidi ya miaka 15 katika sekta ya benki. Amewahi kufanya kazi katika nafasi kadhaa ikiwa ni pamoja na Msimamizi Mikopo (Azania Bank), Msimamizi wa Mifumo (Uchumi Commercial Bank), Mhandisi Msaidizi (Craft Silicon Nairobi), Meneja Tehama (Mfuko wa Rais) na Afisa Mwandamizi wa Uendeshaji (Benki ya Wanawake).
Ana uzoefu wa zaidi ya miaka 10 katika taaluma ya benki. Aliwahi kuwa Mkaguzi Mkuu (Benki ya Wanawake) na Msimamizi wa Tawi (CRDB PLC). Pia ni mjumbe wa Taasisi ya Wakaguzi wa Ndani (IIA) na Bodi ya Taifa ya Uhasibu na Ukaguzi wa Hesabu (NBAA).
He has over 13 years experience in banking holding various positions including Finance Manager(Bank of Baroda),Head of Risk Management (DCB),Risk and Compliance Manager (ACB). He is a member of (IIA), (GARP), (NBAA) and (T.I.O.B). He has attended various trainings internationally and locally.
Bw. Peter Tarimo Meneja Ukaguzi wa Ndani
Bw. Peter Tarimo ni Meneja Mkaguzi wa Ndani wa Maendeleo Bank kwa zaidi ya Mwaka mmoja sasa. Kitaaluma ana Stashahada ya Benki, Cheti cha Uhasibu na Ukaguzi wa mahesabu, Shahada ya Uzamili ya Sayansi katika Usimamizi wa Manunuzi na Ugavi kutoka Chuo Kikuu Mzumbe na Shahada ya Sayansi katika Hisabati na Takwimu kutoka Chuo Kikuu cha Dar es Salaam. Amehudmia sekta ya benki kwa zaidi ya miaka13 na aliwahi kushikanafasi mbalimbali katika uzoefu wake ikiwa ni pamoja na Meneja wa Fedha ( Bank of Baroda ) , Mkuu wa Usimamizi wa Athari ( DCB ), Meneja wa Hatari na Uzingatiaji Sheria (ACB). Bw. Tarimo ni mjumbe wa ( IIA ), ( GARP ), (NBAA ) na ( T.I.O.B ). Pia amehudhuria mafunzo mbalimbali ya kimataifa na ndani ya nchi.
Annual Report 2014 Taarifa ya Mwaka
27
Maendeleo Bank
Managing Director’s Report Ripoti ya Mkurugenzi Mtendaji
D
ear Esteemed Shareholders, it gives me pleasure to present these maiden annual and 2014 financial reports. Year 2014 was the first full year of operations of our bank yet it was a year of growth.
In 2014, we realized satisfying business results; our loss position was much rewarding comparing to the expected loss which was TZS 1.2 billion against an actual loss of TZS 281.0 million our customer base rose significantly from 2,200 customers when we opened the doors in September 2013 to 7,580 by end of the 4th quarter 2014. Being our inaugural year our total assets reached TZS 19.7 billion against a budget of TZS 10.40 billion. However, our achievements in 2014 are not only purely financial in nature. We took some major steps towards fulfilling our mission and tagline ‘Together in Progress’. We trained our staff in different professional areas, launched several new products and upgraded key processes to safeguard operations of the bank and regulatory compliance.
N
dugu Wanahisa, inanipa furaha kuwasilisha Ripoti ya Mwaka 2014 kwenu. Mwaka 2014 ulikuwa Mwaka wetu wa kwanza kutoa huduma
kwa Mwaka mzima, lakini nafurahi kuwaeleza kuwa ulikuwa Mwaka wa ukuaji wa biashara. Katika mwaka 2014, tumepata matokeo ya kuridhisha, kinyume cha matarajio ya kupata hasara ya shilingi TZS bilioni 1.2, hasara iliyopatikana ilikuwa TZS milioni 281.0 tu. Wateja wetu wameongezeka kwa kiasi kikubwa kutoka wateja 2,200 baada ya kuanza kutoa huduma Septemba 2013 hadi wateja 7,580 kufikia mwisho wa mwaka 2014. Mbali na kuwa mwaka wetu wa kwanza wa utoaji huduma za benki, amana zetu zilifikia TZS bilioni 19.7 dhidi ya bajeti ya TZS bilioni 10.4. Hata hivyo, mafanikio yetu katika mwaka 2014 ni mapana zaidi ya yale ya kifedha. Tumechukua hatua mbalimbali kuweza kutimiza dhima ya benki yetu “Pamoja katika Maendeleo”. Tulifanya mafunzo ya wafanyakazi wetu katika maeneo mbalimbali ya kiutendaji, tumezindua bidhaa kadhaa mpya na kuboresha mifumo muhimu kwa ajili ya kulinda shughuli za benki na kufuata kanuni.
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Annual Report 2014 Taarifa ya Mwaka
Maendeleo Bank
Managing Director’s Report | Ripoti ya Mkurugenzi Mtendaji
Empowerment of Entrepreneurs who owns Micro, Small and Medium
Uwezeshaji wa Wajasiriamali ambao wanamiliki; biashara ndogo na
Enterprises has been our main focus thus contributing to individual
za kati imekuwa lengo letu kuu na hivyo kuchangia katika ustawi
and family economic wellbeing. Number of workshops has been
mtu binafsi na familia kiuchumi. Katika kipindi hiki tulifanya mafunzo
undertaken along these segments which has benefited over 1,500
yaliyojumuisha wajasiriamali 1,500 mkoani Dar es Salaam bila kujali
entrepreneurs in Dar es Salaam regardless of their ethnicity and
makabila yao na imani. Zoezi hili ni endelevu na wajasiriamali wengi
beliefs. This will continue as more entrepreneurs are expected to
zaidi wanatarajiwa kufaidika.
benefit from this agenda. Ukuaji wa biashara yetu Mwaka 2014 ni matokeo ya kuendelea kwetu Maendeleo Bank results in 2014 have benefited from our ongoing
na uwekezaji katika bidhaa, mikopo, masoko na mauzo. Maendeleo
investments in product portfolio, lending and good marketing and
Bank inaamini kwamba huduma bora zinazolenga makundi
sales campaigns. Maendeleo Bank believes that serving clients
mbalimbali ni jambo la msingi mno katika utoaji wa huduma kwa
through tailor made and easily accessible services is a critical element
wateja. Maendeleo Bank itaendelea na juhudi za kuboresha tawi lake
in attracting customers and retaining them. Maendeleo Bank will
na pia kufungua jipya ili kuweza kuvutia wateja wapya na kuboresha
therefore continue to expand our flagship through opening a new
huduma zaidi. Kwa hiyo, mipango yetu ya mwaka 2015 ni makubwa
branch and initiate more services that are tailored to avail customers
na ya uhakika: ikiwemo kuongeza ukubwa wa tawi letu, kuanza
affordable and convenient financial services. Consequently, our plans
upembuzi wa kufungua tawi jipya na kuanzisha huduma mpya kwa
for 2015 are both ambitious and modest: we will expand our main
kushirikiana na wabia mbalimbali ili kuchochea ukuaji wa uchumi.
branch banking hall, undertake feasibility study to open a new branch and create more tailor made services and collaborate with other
Maendeleo Bank inaamini mahitaji ya bidhaa maalum na zinazolenga
partners who will foster Maendeleo Bank growth and service delivery.
makundi mengi ni jambo muhimu ili kufikia mahitaji ya makundi mbalimbali. Mwaka 2014, tulianzisha huduma kadhaa kama;
Maendeleo Bank strongly believes that specific products are needed
huduma za uwakala wa bima, huduma za kibenki kwa simu yaani MB
to meet the demands of different customer groups and achieve
Mobile pamoja na mikopo ya kilimo. Tunaamini huduma hizi mpya
everybody’s financial aspirations. We have extended our product
zitachangia kwa kiasi kikubwa kujenga msingi bora wa faida baadae.
portfolio considerably in the year under review.In2014 we launched Insurance Agency, Mobile Banking and Agribusiness loans. We
Ili kuendana na ukuaji wa benki, benki iliongeza nguvu kazi yake
strongly believe these new products will boost our profitability further
mwaka 2014 kwa kuajiri wafanya kazi wapya 9 kutoka 14 wakati
in coming years.
tulipoanza kutoa huduma. Tutaendela kutilia mkazo mafunzo ya wafanyakazi na maendeleo yao, huduma mpya na uboreshaji
To enable modest growth, we increased our workforce by 9 people
wa usimamizi. Kutokana na ukuaji unaotazamiwa tunategemea
in 2014 from 14 when we opened the doors in September 2013.We
kuendelea kuwekeza mwaka 2015. Weledi na ufanyakazi mzuri
will also maintain our focus on training and developing staff. New
kwa wafanyakazi wetu vimekuwa ni nguzo muhimu ya tunu zetu
products and new regulations, as well as high growth, mean that a
ambazo ni ubunifu, kuheshimu kila mtu,uwajibikaji,ufuataji sheria,
similar investment is demanded in 2015.
uwezeshaji na kujali Jamii, kupitia tunu hizi tumejenga msingi mzuri wa mafanikio.
Staff dedication and commitment has been a key factor to our success. All staff are committed to the bank’s core values which are: Innovation,
Pamoja na kutilia mkazo kwa kufuata tunu za benki, Maendeleo Bank
Respect for the individuals, Accountability, Integrity, Empowerment
imetilia mkazo mkubwa kutoa msaada kwa Jamii kupitia mkakati
and Caring for the Community. Through these commitments, we
wa kusaidia Jamii. Katika kipindi hiki Maendeleo Bank ilitoa msaada
have built a strong foundation of our bank towards great success and
wa vifaa kwa hospitali ya Temeke, msaada wa vifaa vya shule, kwa
reputation to the public.
wanafunzi walemavu wanaolelewa kwenye kituo cha Mtoni Diakonia pia tulitoa msaada kwa Shule ya Sekondari ya Wasichana ya Mkuza Kibaha. Tunatarajia kuendelea na mikakati hii mwaka 2015.
Annual Report 2014 Taarifa ya Mwaka
29
Maendeleo Bank
As part of living our values, in 2014, Maendeleo Bank has touched the
Pamoja na mafanikio haya, kuna changamoto nyingi zinazotakiwa
lives of the needy society in the country through its community and
kutatuliwa ikiwemo; kuongeza kasi ya kuongeza eneo la huduma,
social responsibility outreach. The bank donated medical equipment
kuhamasisha utumiaji wa huduma mbadala za benki pamoja na
to Temeke Hospital, various items to the handicapped pupils at Mtoni
uboreshaji wa usimamizi wa mikopo.
Deaconic Centre and contributed beds and mattresses to Mkuza Girls Secondary School in Kibaha. We have similar plans for 2015 to touch
Tunashuhudia ukuaji wa ushindani kati ya sekta ya kibenki na
the lives of other needy society in our country.
makampuni ya simu, lakini tunatazamia kufikia malengo yetu. Ukuaji wa uchumi unatarajiwa kuvuka asilimia 7, ukubwa wa idadi ya
There are still challenges ahead, however. We will accelerate the
watanzania wasiopata huduma za kibenki ni fursa kubwa kwetu.
expansion of banking hall, promoting alternative channels and upgrade service levels. We will also improve how we monitor loan
Bodi ya wakurugenzi imetoa msaada mkubwa mno pamoja na
performance.
kusimamia vizuri utendaji na sera za kibenki, hivyo wamekuwa chachu ya maendeleo ya benki yetu. Napenda kuchukua fursa hii kuishukuru
With ever growing competition from commercial banks and mobile
Bodi ya wakurugenzi na wafanyakazi wote kwa kujitoa na kufanya kazi
operators, we believe Maendeleo Bank still has a good opportunity
kwa bidii katika kufuatilia malengo ya benki yetu.
to grow its business and profitability, The anticipated growth of the economy is expected to reach well above 7%, the magnitude of
Napenda kushukuru Benki Kuu ya Tanzania, Soko la Hisa la Dar es
unbanked population are anticipated to be key drivers of Maendeleo
Salaam (DSE), Mamlaka ya Masoko ya Mitaji na Amana (CMSA) kwa
Bank growth.
ushirikiano na usimamizi mzuri. Mwisho, ingawa si mwisho wa umuhimu, napenda kulishukuru Kanisa la Kiinjili la Kilutheri Tanzania
I take this opportunity to express my heartfelt thanks to my fellow
Dayosisi ya Mashariki na Pwani kwa msaada na ushirikiano katika
staff for their dedication and settled mind towards fulfillment of the
kuchochea uanzishwaji wa benki hii ambapo walivumilia changamoto
bank’s objectives. The Board of Directors has always offered great and
nyingi za uanzishwaji wa benki kwa hali na mali.
relenting support during the entire period and their guidance has been a key to this success.
Katika kuhitimisha, mwaka 2014 ulikuwa mwaka wenye changamoto nyingi lakini wenye mafaniko, tunaamini mwaka 2015, tutafaidika na
I thank the Bank of Tanzania, the Dar es Salaam Stock Exchange,the
wigo mpana wa wateja tulionao, msaada wa Bodi, tawi jipya, huduma
CMSA and other regulatory organs for their support and guidance.
mpya na wafanyakazi wenye weledi, utakuwa mwaka wa mafanikio.
Lastly but not least, I wish to thank the Evangelical Lutheran Church in Tanzania, Eastern and Coastal Diocese for their extended and
Kwa niaba ya Maendeleo Bank nina imani kubwa na wadau wote na
unparalleled support during the entire period of the year, especially
ninawahakikisha kuwa huu ni mwaka mwingine wa mafanikio.
during settling the bank’s operations where they a absorbed number of inconveniences. In conclusion, 2014 was challenging yet rewarding for Maendeleo Bank and we are confident that although 2015 is to be a general elections year, we will be successful. We will benefit from a broader customer base, Board support, additional branch, new products and our well-trained and committed staff. Meanwhile on behalf of Maendeleo Bank, it is with great confidence that I am assuring all the stakeholders of another successful year.
Ibrahim Mwangalaba Managing Director
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Annual Report 2014 Taarifa ya Mwaka
Ibrahim Mwangalaba Mkurugenzi Mtendaji
Maendeleo Bank
Executive Saving Account PRODUCT FEATURES Opening balance of Tsh 100,000 or Usd 100 Free statements- monthly, quarterly Unlimited withdrawals Minimum operating balance Tsh 50,000 or USD 50 24 hours access to funds through the bank’s countrywide Umoja Switch ATM’s Access to special cheque books Annual Report 2014 Taarifa ya Mwaka
31
www.maendeleobank.co.tz
Maendeleo Bank
Maendeleo Bank News Taarifa mbalimbali za Maendeleo Bank
T
his Annual General Meeting is one of favorite time in Maendeleo bank. Gathered here at the Msasani Hall, we are reminded of our roots in the Society and in the belief of our Lord Jesus Christ, that individual human beings are innately good and capable of creating a Christ centered business, moral and ethical world. This is the heart of our mission as a diocese and of the message we are trying to teach.
Bishop Dr. Alex G. Malasusa Bishop of ELCT Eastern & Coastal Diocese and Head of ELCT .
M
kutano huu Mkuu wa Mwaka ni moja ya mafanikio makubwa ya Maendeleo Bank. Tulivyokusanyika hapa katika ukumbi huu wa Msasani, tunakumbushwa misingi yetu katika jamii inayotuzunguka na katika imani ya Bwana wetu Yesu Kristo, kwamba binadamu kwa asilia ni watu wazuri na wenye uwezo wa kujenga biashara inayozingatia maadili na kuendana na dunia ya kimaadili. Ni dhamira yetu kama dayosisi na ujumbe tunaokusudia kufundisha.
Maendeleo Bank Establishment Committee Kamati ya uanzilishi wa Maendeleo Bank
The Establishment Committee of Maendeleo Bank. from Left to Right Mr. Mgisa Mtebe, Mr. William Mlaki, Dean George Fupe, Mr.Amulike Ngeliama, Mr.Naftal Nsemwa. Absent on the picture are : Mr. Alliterius Milinga, Mr. Godfrey Nkini and Rev. Amani Lyimo.
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Annual Report 2014 Taarifa ya Mwaka
Maendeleo Bank
Staff of Maendeleo Bank having a group picture with the retired Bishop Dr. Elinazar Sendoro during a soft launch of MB Mobile at ELCT Mbezi Beach Parish.
Maendeleo Bank staff serving customers of ELCT Mbezi Beach Parish to open Bank Accounts.
Staff of Maendeleo Bank and UAP Insurance in a group photo after the launch of Maendeleo Bank Insurance Agency.
The retired Bishop Dr. Elinazar Sendoro, Mr. Naftal Nsemwa and Mr. Ibrahim Mwangalaba occasioning the launch of MB Mobile at ELCT Mbezi Beach Parish.
Annual Report 2014 Taarifa ya Mwaka
33
Maendeleo Bank
34
Maendeleo Bank News | Taarifa mbalimbali za Benki ya Meandeleo
Mr. Nick Itunga Country Manager of UAP Insurance shaking hands with Mr. Ibrahim Mwangalaba, Maendeleo Bank Managing Director after the unveiling of the launch of the Maendeleo Insurance Agency.
Maendeleo Bank Board Members with the Guest of Honor Deputy Minister of Finance Hon. Mwigulu Nchemba in presence of Bishop Dr. Alex G. Malasusa on a group photo after the launch of MB Mobile.
Maendeleo Bank Staff serving a client to open a bank account in one of their recruitment drives.
Dean George Fupe officiating a business meeting with ELCT- ECD Pastors.
Annual Report 2014 Taarifa ya Mwaka
Maendeleo Bank News | Taarifa mbalimbali za Benki ya Meandeleo
Deputy Minister of Finance Hon. Mwigulu Nchemba congratulating Maendeleo Bank Board Members on the launch of MB Mobile.
Maendeleo Bank
Prime Minister Hon. Mizengo Pinda, Minister for Industries and Trade Hon. Dr. Abdallah Kigoda, Minister for Investment and Empowerment in Prime Minister’s Office Hon. Dr. Mary Nagu, and Deputy Minister for Industries and Trade Hon. Ms. Janeth Mbene, Maendeleo Bank Board Members, staff and other invited guests during the listing of Maendeleo Bank at DSE.
Maendeleo Bank staff in one of the team Building session aimed at building cohesion and togetherness.
Maendeleo Bank staff in one of the team Building session aimed at building cohesion and togetherness.
Annual Report 2014 Taarifa ya Mwaka
35
Maendeleo Bank
Maendeleo Bank Products Huduma za Maendeleo Bank Banking products and services offered by Maendeleo Bank:
Huduma na Bidhaa za kibenki zinazotolewa na Maendeleo Bank
The bank offers the following products in four main currencies
Benki inatoa huduma zifuatazo katika sarafu kuu nne; TSHS , USD,
i.e. TSHS, USD, GBP & EURO
GBP na EURO
•
Jamii Current account for NGOs, Schools, Churches,
•
•
Mosques and any Organization/Group helping Community
•
Current account for companies and sole proprietor
•
Savings Account : 1. Executive Savings account where you are given
Shule , Makanisa, Misikiti na Mashirika / Makundi yanayosaidia. •
Akaunti ya Hundi kwa ajili ya makampuni na wafanyabiashara binafsi
•
Akaunti ya Akiba: 1.
internal cheque book 2. Wekeza Savings Account where your savings are
Executive Savings Account, mteja hupewa kitabu cha hundi ya ndani
2. Wekeza Savings Account; akiba yako inawekwa kwenye
converted into FDR when you have a balance of multiple of one million
akaunti ya muda maalum yaani FDR kama una akiba zaidi
3. Ahadi Savings Account where you keep your promise
ya shilingi milioni moja 3. Akaunti ya Ahadi; ni akaunti maalum kwa ajili ya malengo
of a certain goals you want to achieve 4. Junior Savings Account where you have a saving for
maalum unayotaka kufikia 4. Junior Savings Account;ni akaunti kwa ajili ya mtoto wako
your child •
Jamii Current Acccount kwa ajili ya Taasisi zisizo za Kiserikali ,
5. Akaunti ya muda Maalumu
Fixed deposit Accounts
For the savings and Fixed deposits we provide attractive interest
Kwa akaunti za muda maalum mteja atapata fursa ya kiwango cha riba
rate.
cha kuvutia kulingana na maelewano.
1. For loans we offer variety of loans as follows:-
1. Maendeleo Bank hutoa aina nyingi za mikopo kama ifuatavyo:
•
SME Loans
•
Mikopo ya biashara
•
Solidarity group Loans
•
Mikopo ya vikundi
•
Employees Loans Scheme – Salary Loans
•
Mikopo ya wafanyakazi
•
Micro Loans
•
Mikopo ya biashara ndogo
•
Agri Business loans
•
Mikopo ya kilimo
2. Maendeleo Bank also provides several services to facilitate
2. Maendeleo Bank pia hutoa huduma kadhaa;
transfer of funds within and outside the country.
kuwezesha kutuma na kupokea fedha ndani na nje ya nchi.
TISS for local transfer means within Tanzania and SWIFT for
TISS kwa ajili ya kutuma na kupokea fedha ndani ya Tanzania na
abroad transactions. Our SWIFT CODE is MBTLTZTZ, for more
SWIFT kwa ajili ya kutuma na kupokea fedha nje ya nchi.
details on how to transfer please visit our branch.
SWIFT CODE ya Maendeleo Bank ni MBTLTZTZ,
ATM Services are provided through UMOJA SWITCH
kwa maelezo zaidi juu ya namna ya kupata huduma hizi tafadhali
On health we donated Mattress and Bed sheets at Temeke
tembelea tawi letu.
hospital. 3. MB Mobile 3. Mobile Banking
Huduma kwa njia ya simu ya mkononi. Ni huduma ya kutumia simu
MB Mobile is 24/7 full banking service that allows Maendeleo
ya mkononi inayomuwezesha mteja kupata huduma na taarifa
Bank customers to perform financial transactions and access
mbalimbali saa 24 kwa kutumia simu ya mkononi sehemu yoyote na
banking information using their mobile phones anytime and
wakati wowote.
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Annual Report 2014 Taarifa ya Mwaka
Maendeleo Bank
anywhere.
Ili kupata tafadhali jaza fomu na sajili namba moja ambayo
To access MB MOBILE please fill the application form and
itatumika.
provide one number which will be registered.
Kujiunga tafadhali piga *150*52# kisha fuata maelekezo.
To join please dial *150*52# then follow instructions 4. Huduma za Uwakala wa Bima 4.
Maendeleo Bank Insurance Agency
Maendeleo Bank hutoa huduma za uwakala wa bima kwa ajili
Maendeleo Bank also provide insurance agency on various
ya majanga mbalimbali ikiwemo;
categories as follows:-
•
Bima za Magari
•
Motor
•
Bima za Maisha.
•
Non motor
•
Bima nyinginezo.
•
Life Insurance
•
Pia huduma za bima zinaweza kutolewa kwa mkopo.
•
All insurance can be offered by credit 5. Wajibu kwa jamii
5. CSR
Maendeleo Bank inatoa kipaumbele kwa misaada ya jamii
Maendeleo Bank also involved in community by supporting on
hususani katika elimu na afya. Mwaka 2014 Maendeleo
Health and Education
Bank ilishiriki kutoa misaada kwa Jamii kupitia mchango wa
Year 2014 we managed to support/ contribute on health
mashuka na magodoro kwa Shule ya Sekondari ya Wasichana
basically on donating Beds and Mattress for Mkuza Girls
ya Mkuza. Pia Maendeleo Bank ilitoa vifaa vya chakula kwa
Secondary School, and dinning items for DIAKONIA center.
kituo cha Mtoni DIAKONIA.
6. Entrepreneurs Training
Katika afya Maendeleo Bank iliipatia hospitali ya Temeke
For the year 2014 Maendeleo bank provided two sessions of
msaada wa magodoro na mashuka kwa ajili ya wagonjwa.
training to stakeholder. And the main agenda were how to manage the Business challenges.
6. Mafunzo kwa wajasiliamali
January 2014 the first training held at Hurbert Kilato located at
Maendeleo Bank ilifanya vikao vya mafunzo kwa wadau. Na
Kimara Temboni over 500 participants were entrepreneurs from
ajenda kuu ilikuwa ni namna ya kukabiliana na changamoto za
Ubungo, Kimara and Mbezi Luis.
Biashara. Janauri 2014 mafunzo ya kwanza yalifanyika Hurbert
Second session held at kijitonyama Lutheran Church, and
Kilato Kimara Temboni zaidi ya wajasiriamali 500 walishiriki
participants were Pastors, Evangelist, Accountants and Parish
kutoka Ubungo, Kimara na Mbezi Luis. Kikao cha pili kilifanyika
workers were 400 people attended.
katika Kanisa la Kilutheri la Kijitonyama. Na washiriki walikuwa Wachungaji, Wainjilisti, Wahasibu na Wafanyakazi , watu 400
7. Team Building
walihudhuria kikao hicho.
Management of Maendeleo Bank also provides team building for all staff. This allows staff to interact and create a strong
7. Kujenga umoja wa wafanyakazi
relationship to the office environment. For the year 2014, the
Uongozi wa Maendeleo Bank hutoa kipaumbele katika
event took place at Jangwani sea breeze. The following activity
kujenga timu ya wafanyakazi yenye uelewano. Hii inawezesha
took place:-
wafanykazi kujenga mahusiano mama kati yao. Mwaka 2014
•
Tag of war
zoezi hili lilifanyika mara kadhaa ambapo michezo mbalimbali
•
Team work rob pulling
ilifanyika.
•
Creation of hut
Annual Report 2014 Taarifa ya Mwaka
37
Maendeleo Bank
Smart Businesses are insured Get the following insurance cover Fire and Allied Perils Burglary / Theft Money Insurance Public Liability Machinery Breakdown
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Annual Report 2014 Taarifa ya Mwaka
Contractors All Risk Erection All Risk Electronic Equipment Goods In transit Professional Indemnity
Bonds (All type of bonds) Product Liability Employers Liability etc.
www.maendeleobank.co.tz
Maendeleo Bank
Financial Statements Taarifa za Hesabu BOARD OF DIRECTORS’ REPORT 1. INTRODUCTION The Board of Directors of Maendeleo Bank PLC has the pleasure to present their annual report and the audited financial statements for the year ended 31 December 2014, which disclose the state of affairs of the Bank. This report has been prepared in accordance with the Tanzania Financial Reporting Standards (TFRS) No. 1.
2. BACKGROUND Maendeleo Bank PLC is a regional bank established with a target to serve individuals, Savings and Credit Cooperative Society (SACCOS), micro, small and medium enterprises (SMEs), salaried workers as well as group and corporate clients. The shareholding structure comprises of various church institutions, individuals, Evangelical Lutheran Church Tanzania (ELCT) - Eastern and Coastal Diocese and United Evangelical Mission.
3. ESTABLISHMENT Maendeleo Bank PLC is a public limited company established under Companies Act No. 2 of 2002, with registration number 81006 and granted a Banking Licence number NBA 00026 issued by the Bank of Tanzania.
4. VISION AND MISSION STATEMENTS 4.1 Vision The vision of the Bank is “To become the premier bank in Tanzania, which is customer need driven with competitive returns to shareholders” 4.2 Mission The mission of the Bank is “To grow our business whilst investing on communities that we serve and improving the lives of our employees. We strive to provide competitive and innovative financial services to all stake holders and the society”.
5. PRINCIPAL ACTIVITIES The bank carries on business of micro-finance in all its departments, branches and agencies including: • Receiving deposits of money, including savings and time deposits, • Lending money to individuals, small scale business, industrial, commercial, Saving and Credit Cooperation Society (SACCOS), etc. • Providing money transfer services, • Facilitating payment systems through operating current accounts, and other accounts for individuals.
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Maendeleo Bank
6. OBJECTIVES The Bank has several objectives which are: • To mobilize financial resources from the society in the form of deposits and make them available to entrepreneurs with viable businesses • To promote easy access to financial services for entrepreneurs running micro, small and medium enterprises • To promote viable investment owned by diocese sectors through making available loans and other financial services and investments advisory services • To become a sustainable and profitable bank so as to enhance public confidence and create return to investors. 7. CAPITAL The Bank has a capital to a tune of TZS 4,514,528,000 comprising of shares of various church institutions, individuals, ELCTEastern and Coastal Diocese and United Evangelical Mission.
8. RISK MANAGEMENT AND INTERNAL CONTROL The Board accepts final responsibility for the risk management and internal control systems of the Bank. It is the task of management to ensure that adequate internal financial and operational control systems are developed and maintained on an ongoing basis in order to provide reasonable assurance regarding: • The effectiveness and efficiency of operations • The safeguarding of the Bank’s assets • Compliance with applicable laws and regulations • The reliability of accounting records • Business sustainability under normal as well as adverse conditions • Responsible behaviours towards all stakeholders. The efficiency of any internal control system is dependent on the strict observance of prescribed measures. There is always a risk of non-compliance of such measures by staff. Whilst no system of internal control can provide absolute assurance against misstatement or losses, the Bank’s system is designed to provide the Board with reasonable assurance that the procedures in place are operating effectively. The Board assessed the internal control systems throughout the financial year ended 31 December 2014 and is of the opinion that they met accepted criteria. The Board carries out risk and internal control assessment through the Audit and Risk Committee.
9. PRINCIPAL RISKS AND UNCERTAINTIES Operational, fraud and financial risks are the principal risks that may significantly affect the Bank’s strategies and development. Below we provide a description of the operational fraud and financial risks facing the Bank and the related management controls in place: Fraud risk There is a general increase in fraudulent transactions in the Banking industry in Tanzania. Management have put in place several controls to mitigate the fraud risk. These controls include: • The Bank has adequate segregation of duty control in each sensitive area of the operations which include cheque handling, Automated Teller Machin (ATM) card and Personal Identification Number (PIN) controls and strong room • The Bank has adequate internal reports generated by system on daily basis that helps detection of any misappropriations
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Annual Report 2014 Taarifa ya Mwaka
Maendeleo Bank
•
and irregularities The Bank has an Internal Auditor who checks and provides assurance on the banks operations which serves as a protection against any future risk.
Operational risk This is a risk resulting from the Bank’s activities not being conducted in accordance with formally recognised procedures including non-compliance with Know Your Customer (KYC) and account opening procedures. Management ensures that the Bank complies with KYC and other internal procedures. Management have put in place several controls to mitigate the operational risk including the following: • The Bank has operational manual for its daily activities and which provides adequately procedures and rules of attending every activity of the Bank. • The Bank has several policies which guides the operations of every department and units in a bank. • The Bank has a system of making sure every transaction and event concluded has proper supervision and authorization. Financial risk The Bank’s activities expose it to a variety of financial risks and those activities involve the analysis, evaluation, acceptance and management of some degree of risk or combination of risks. More details of the financial risks facing the Bank are provided in Note 4 to the financial statements. Management have put in place several controls to mitigate the financial risk including the following: • The Bank has adequate policies that guide each operation relating to financial risk like credit policy, financial policy and Asset and Liability Committee (ALCO) policy • Management has internal reports that serve as red flags which puts attention to management in thoroughly reviewing the respective operations like net open position, exchange rates and general asset revaluation • The Bank has in place insurance policies that cover for credit life Insurances for its borrowers.
10. MEMBERSHIP OF THE BOARD OF DIRECTORS The Directors of the Bank at the date of this report and who have served since 2013 are:
NAME
POSITION
AGE
NATIONALITY
QUALIFICATION
Mr. Amulike Ngeliama
Chairman
65
Tanzanian
B. A (Economics)
Mrs. Dosca Mutabuzi
Vice Chairperson
57
Tanzanian
LLB, MBA, Advocate of High Court
Amb. Richard Mariki
Director
71
Tanzanian
Bachelor of Arts, MSC (Management)
Mr. Naftal Nsemwa
Director
68
Tanzanian
B. A (Economics, PGD in Projects Analysis.
Rev. Ernest Kadiva
Director
48
Tanzanian
B’com (Marketing), Bachelor of Divinity, Masters of Theology.
Mr. Felix Mlaki
Director
41
Tanzanian
B. A (Economics, MBA - Finance)
Mrs. Anna Mzinga
Director
38
Tanzanian
(Advanced Diploma in Accountancy, CPA (T), MBA – Finance)
46
Tanzanian
B’Com (Marketing), MBA (Finance) ,Associateship Diploma in Banking.
Mr. Ibrahim Mwangalaba Executive Director
Annual Report 2014 Taarifa ya Mwaka
41
Maendeleo Bank
11.CORPORATE GOVERNANCE The Directors consider corporate governance as a key to good performance of the Bank. In view of this, the Directors continued to strengthen good governance system by reviewing policies in the areas of the Board and Board committees’ activities and general management of the Bank. Board guidelines and committees charters were reviewed during the period as well as policies of the Bank. Chairman and Managing Director The Chairman is a non-executive Director, and the roles of chairman and Managing Director are separate, with their responsibilities clearly defined. The Chairman is responsible for leading the Board and ensuring its effectiveness. The Managing Director is responsible for the execution of the Bank’s strategy, policies and the day-to-day business of the Bank, supported by the management and executive committees which he chairs. Board Structure The Board comprises of eight Directors among them one Chairperson and Vice Chairperson. Members of the Board were appointed by the Bank Steering Committee and followed by vetting which was done by Bank of Tanzania. The Board will serve for the period of three years from 2013. Board Meetings The Board of Directors and the Committees are each required to meet four times a year, i.e. once in every quarter, one annual General Meeting for Shareholders and Extra Ordinary Meetings when required or once when an urgent matter arises. During the period ended 31 December 2014 the Board held six ordinary meetings which deliberated on the Bank’s policies, Bank’s performance as well as the Bank’s budget and the five years strategic plan 2014 -2018. Committees of the Board As at 31 December 2014 the Board had two Committees namely the Audit and Risk Committee and the Credit Committee. The activities of the Committees are governed by the Committee’s charters approved by the Board. Audit and Risk Committee The Audit and Risk Committee of the Board had the following members. NAME
POSITION
Mr. Naftal Nsemwa
Director
Mr. Felix Mlaki Mrs. Anna Mzinga
42
NATIONALITY
QUALIFICATION
68
Tanzanian
B. A (Economics, PGD in Projects Analysis.
Director
41
Tanzanian
B. A (Economics, MBA - Finance)
Director
38
Tanzanian
(Advanced Diploma in Accountancy, CPA (T), MBA – Finance)
Annual Report 2014 Taarifa ya Mwaka
AGE
Maendeleo Bank
Credit Committee The Credit Committee has the following members: NAME
POSITION
Amb. Richard Mariki
Director
Mr. Naftal Nsemwa
Director
AGE
Mr. Ibrahim Mwangalaba Executive Director
NATIONALITY
QUALIFICATION
71
Tanzanian
Bachelor of Arts, MSC ( Management )
68
Tanzanian
B. A (Economics, PGD in Projects Analysis.
46
Tanzanian
B’Com (Marketing), Associateship Diploma in Banking, MBA (Finance).
The Committee responsibilities were to review the Credit policies and manuals reviewing the credit performance of the bank and approving loans applied. Attendance of Board meetings The Board of Directors had six ordinary Board meetings during the period. The Audit and Risk Committee met five times whilst the Credit Committee met six times during the period under review. The attendance to these Board and Committee meetings by the Directors in 2014 is tabulated below: NAME
Classification
Amulike S.K. Ngeliama
Non-Executive
Dosca K. Mutabuzi
BARCM
BCCM
6
5
N/A
Non-Executive
4
N/A
N/A
Anna T. Mzinga
Non-Executive
3
2
N/A
Felix Mlaki
Non-Executive
4
4
N/A
Reverend G. E. Kadiva
Non-Executive
4
N/A
N/A
Naftal M. Nsemwa
Non-Executive
6
5
6
Amb. Richard Maliki
Non-Executive
6
N/A
6
Ibrahim Mwangalaba
Executive
6
N/A
6
Notes: O.B.M – Ordinary Board Meeting C.C.M – Credit Committee Meeting
MBM
A.C.M – Audit Committee Meeting
When a Director did not attend a Board or Board Committee meeting, an acceptable apology was received by the Board Chairman in advance of the scheduled meeting.
Annual Report 2014 Taarifa ya Mwaka
43
Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 BOARD OF DIRECTORS’ REPORT (CONTINUED) 12.
MANAGEMENT The Management of the Bank is under the Managing Director
and is organized in the following departments: • Finance Department • Credit Department • Information Communication Technology Department • Internal Audit Department 13.
PERFORMANCE FOR THE PERIOD 13.1 Budget vs actual Description Loss for the period Outstanding loans and advances to customers Deposits from customers
Budget TZS`000
Actual TZS`000
Variance %
(1,222,530)
(281.234)
77
4,649,000 7,162,400
7,650,887 15,824,321
64 120
13.2 Actual financial performance The results for the period set out on page 54 and are summarized below:
Operating Income Less: Operating Expenses Loss before tax
2014
2013
12 months TZS`000 1,534,900 (1,855,674) (320,774)
4 months TZS`000 569,362 (1,061,620) (492,258)
The total assets of the Bank as at 31 December 2014 were TZS19,711,390,000 (2013: TZS 7,070,075,000). Out of these balances with other banks amounted to TZS 8,458,378,000 (2013: 4,142,241,000) and loans and advances stood at TZS 7,650,887,000 (2013: TZS 1,339,838,000). Deposits from customers were TZS 15,824,321,000 (TZS 3,019,217,000).
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MAENDELEO BANK PLC FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 BOARD OF DIRECTORS’ REPORT (CONTINUED) 14.
PERFORMANCE INDICATORS The following Key Performance Indicators (KPIs) are effective in measuring the delivery of the Bank’s strategy and managing the business. Target Ratios 2014
Actual Ratios
Statement of financial position
%
%
(i)
Total capital to total assets
43
23
(ii)
Non performing loans, advances and overdrafts to total loans, advances and overdrafts
1 49
2014
(iii)
Gross loans and advances to total deposits
2 65
(iv)
Net Loans and advances to total assets
44
39
Return on average total assets
(6)
(2)
Interest expenses to interest income
12
17
Interest margin to average earning assets
16
12
Statement of profit or loss and other comprehensive Income (i) (ii) (iii) 15.
FUTURE DEVELOPMENTS During the first five years of operations the Bank has planned to increase its branch networks to five branches. At least one branch is expected to be opened in each year.
16.
RESULTS AND DIVIDENDS The Bank made a loss of TZS 281,234,000 (2013: 518,228,000) during year ended 31 December 2014 and the Board of Directors, therefore does not recommend any payment of dividends to shareholders because the net results of operations are still on losses. The Bank’s results for the year ended 31t December 2014 are shown in the statement of profit or loss and other comprehensive income on page 54.
17.
SOLVENCY The Bank’s liquidity position is considered to be good. The total liquid assets amounted to TZS 10,934,092,175. Annual Report 2014 Taarifa ya Mwaka
45
Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 BOARD OF DIRECTORS’ REPORT (CONTINUED) 18.
CAPITAL STRUCTURE The Bank`s capital structure for the year under review is as follows:
Authorised share capital 60,000,000 shares of TZS 500 each Issued and fully paid-up share Capital 9,029,056 shares of TZS 500 each There were no shares issued or repurchased during the year. 19.
2014 TZS`000
2013 TZS`000
30,000,000
30,000,000
4,514,528
4,514,528
REGULATORY CAPITAL During the period, the Bank has complied with the requirements of Bank of Tanzania. The details on capital management are provided on Note 4.5.
20.
SHAREHOLDERS OF THE BANK The following are the main shareholders of the Bank:
Share Holder
No. of Shares
% of total Number of shares
United Evangelical Mission
1,445,551
16.01
Diocese 1.Institutions
1,121,408
12.42
ELCT- Eastern and Costal Diocese
850,000
9.41
S/N
Shareholder
United Evangelical Mission
2.
Hans Macha
3.
ELCT- Eastern and Coastal Diocese 256,000
ECD Investment Trust 217,000 COMPANIES &ELCTSACCOS
% of total shares
1,446,228
723,114
16.0%
910,924
455,462
10.18%
2.4
850,000
425,000
9.4%
200,000
100,000
2.2%
10,000
5,000
0.11%
2.83
4. Turdaco Other Individuals
5,139,097
56.93
TOTAL5.
9,029,056
100
Saccos &Viccoba
6.
Upendo Fm Radio
4,000
2,000
0.04%
7.
Kisarawe Lutheran Seminary
3,000
1,500
0.03%
8.
Mtoni Deaconic Lutheran Centre
2,000
1,000
0.02%
9.
Mkuza Girls Sec. School
2,000
1,000
0.02%
10.
Mbwawa Secondary School
300
150
0.00%
11.
Individuals
5,600,604
2,800,302
62.0%
9,029,056
4,514,528
100%
TOTAL
46
shares
Value of share TZS`000
Annual Report 2014 Taarifa ya Mwaka
Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 BOARD OF DIRECTORS’ REPORT (CONTINUED) 21.
STOCK EXCHANGE INFORMATION The shares of the Bank were listed in the Dar es Salaam Stock Exchange (DSE) on 5 November 2013 where one share was traded at TZS 500 as at the end of the year 31 December 2014 the Bank’s shares were traded at TZS 600 each.
22.
RELATED PARTY TRANSACTIONS Details of related party transactions are shown in Note 30 to the financial statements.
23.
EMPLOYEES WELFARE Management and employees’ relationship There were continued good relations between employees and management for the year 2014. There were no unresolved complaints received by management from the employees during the year. The Bank is an equal opportunity employer. It gives equal access to employment opportunities and ensures that the best available person is appointed to any given position free from discrimination of any kind and without regard to factors like gender, marital status, tribes, religion and disability which does not impair ability to discharge duties. Training facilities Employees are trained by attending workshops and seminars organized by different institutions. Financial assistance to staff Salary advances are provided to all employees who have successfully completed probation according to the Bank’s policies. Medical assistance All members of staff and their spouses up to a maximum number of four beneficiaries (dependants) for each employee were availed medical services by the Bank through an external service provider. Persons with disabilities Applications for employment by disabled persons are always considered, bearing in mind the aptitudes of the concerned applicant. In the event of members of staff becoming disabled, every effort will be made to ensure that their employment with the Bank continues and that appropriate training is arranged. It is the policy of the Bank that training, career development and promotion of disabled persons should be identical to that of other employees.
Annual Report 2014 Taarifa ya Mwaka
47
Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 BOARD OF DIRECTORS’ REPORT (CONTINUED) The Bank has a statutory requirement to contribute to the fund preferred by the employee, which is a defined contribution scheme. The Bank contributes 10% of employees gross emoluments to the scheme. The average number of employees during the period was 23 (2013: 17). 24.
GENDER PARITY The Bank gives gender equal opportunities to all Tanzanians during recruitment and filling of positions provided they have the required qualifications and ability. The Bank had a total of 23 employees (2013: 17 employees) at year end, out of which 5 are female (2013: 4 females) and 18 males (2013; 13 males).
25.
POLITICAL AND CHARITABLE DONATIONS The Bank did not make any political donations during the year. Donations made to charitable and other organizations during the period amounted to TZS 10, 365,250.
26.
CORPORATE SOCIAL RESPONSIBILITY The bank has the Corporate Social Responsibility policy which provides guidelines for the identifications and management of programmes attached.
27.
ACCOUNTING POLICIES AND CRITICAL JUDGEMENT AND ESTIMATES Results of the Bank are sensitive to the accounting policies, assumptions and estimates that underlie the preparation of the financial statements. When preparing the financial statements, it is the Directors’ responsibility under the Tanzania Companies Act 2002 to select suitable accounting policies and to make judgments and estimates that are reasonable and prudent. The accounting policies that are deemed critical to our results and financial position, in terms of the materiality of the items to which the policies are applied and the high degree of judgment involved, including the use of assumptions and estimation, are described in Notes 2 and 3 to the financial statements.
28.
PREJUDICIAL ISSUES In the opinion of the Directors there are no prejudicial issues that may affect the Bank.
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MAENDELEO BANK PLC FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 BOARD OF DIRECTORS’ REPORT (CONTINUED) 29.
INDEPENDENT AUDITORS M/s INNOVEX Auditors, Certified Public Accountants of PO Box 75297, Dar es Salaam were appointed as the independent auditors of Maendeleo Bank PLC for the period ended 31 December 2014. The auditors have expressed their willingness to continue in office. A resolution proposing the reappointment of auditors of the Bank for the year ending 31 December 2015 will be put to the Annual General Meeting.
By order of the Board __________________ Chairman
th
27 March 2015 _____________
Date
Annual Report 2014 Taarifa ya Mwaka
49
Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 STATEMENT OF DIRECTORS’ RESPONSIBILITIES The Tanzania Companies Act No.12 of 2002 requires the Directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Bank as at the end of the financial year and of the operating results of the Bank for that year. It also requires the Directors to ensure that the Bank keeps proper accounting records which disclose with reasonable accuracy at any time the financial position of the Bank. They are also responsible for safeguarding the assets of the Bank. The Directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards. This responsibility includes: designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error, selecting and applying appropriate accounting policies, and making accounting estimates that are reasonable in the circumstances. The Directors accept responsibility for the annual financial statements, which have been prepared using appropriate accounting policies supported by reasonable and prudent judgments and estimates, in conformity with International Financial Reporting Standards and in the manner required by the Companies Act, 2002. The Directors are of the opinion that the financial statements give a true and fair view of the state of the financial affairs of the Bank and of its operating results. The Directors further accept responsibility for the maintenance of accounting records which may be relied upon in the preparation of financial statements, as well as adequate systems of internal financial control. Nothing has come to the attention of the Directors to indicate that the Maendeleo Bank PLC will not remain a going concern for at least the next twelve months from the date of this statement.
Approved by the Board of Directors
__________________ Chairman
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Annual Report 2014 Taarifa ya Mwaka
27th March 2015 _____________
Date
Maendeleo Bank
INNOVEX Auditors 19 Kilimani Road Ada Estate (Near the French Embassy) P.O. Box 75297 Dar es Salaam, Tanzania Mobile: +255 787 747411 Landline: +255 22 2664099 Fax: +255 22 2664098 Email: admin@innovexdc.com Website: www.innovexdc.com The Chairperson Maendeleo Bank PLC PO Box 216 Dar es Salaam Tanzania INDEPENDENT AUDITOR’S REPORT TO MEMBERS OF MAENDELEO BANK PLC Report on the Financial Statements We have audited the financial statements of the Maendeleo Bank PLC, set out on pages 53 up to 101 which comprise the statement of financial position as at 31 December 2014, statement of profit or loss and other comprehensive income, statement of cash flows statement, and statement of changes in equity for the year ended 31 December 2014 and summary of significant accounting policies as well as other explanatory notes. Maendeleo Bank PLC Directors’ responsibility for the financial statements Maendeleo Bank PLC`s Directors are responsible for the preparation and fair presentation of these financial statements in accordance International Financial Reporting Standards and the provisions of the Banking and Financial Institution Act, 2006 and Companies Act, No. 12 of 2002. The responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditor’s responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we plan and perform the audit to obtain reasonable, but not absolute, assurance whether the financial statements are free from material misstatement, whether due to fraud or error. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The audit procedures selected depend on the auditor’s assessment of the risk
Annual Report 2014 Taarifa ya Mwaka
51
Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 INDEPENDENT AUDITOR`S REPORT (CONTINUED) material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of the financial statements as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant estimates made by management, as well as evaluating the overall financial statement presentation and disclosures. We believe that the audit evidence that we have obtained is sufficient and appropriate to provide a reasonable basis for our opinion on the financial statements. Opinion In our opinion, the financial statements present fairly, in all material respect, the financial position of the Maendeleo Bank PLC as at 31 December 2014 and its financial performance and its cashflows for the period then ended in accordance with the International Financial Reporting Standards and the requirements of the Companies Act No 12 of 2002 and the Banking and Financial Institution Act, 2006. . Report on Other Legal and Regulatory Requirements This report, including the opinion, has been prepared for, and only for, the company’s members as a body in accordance with the Companies Act, No. 12 of 2002 and for no other purposes. As required by the Companies Act No. 12 of 2002, we are also required to report to you if, in our opinion, the Directors’ Report is not consistent with the financial statements, if the company has not kept proper accounting records, if the financial statements are not in agreement with the accounting records, if we have not received all the information and explanations we require for our audit, or if information specified by law regarding Directors’ remuneration and transactions with the company is not disclosed. In respect of the foregoing requirements, we have no matter to report.
INNOVEX Auditors Certified Public Accountants Dar es Salaam Irving Manning, CPA - PP
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Annual Report 2014 Taarifa ya Mwaka
Date 10th April 20152015 Date:
Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2014 ASSETS Cash and balances with Bank of Tanzania Placements and balances with other banks Loans and advances to customers Inventories Other assets Property and equipment Intangible assets Leasehold improvements Deferred tax Total assets
2014 TZS`000 2,537,166 8,458,378 7,650,887 15,236 238,785 344,593 167,541 285,234 13,570 19,711,390
2013 TZS`000 620,632 4,142,241 1,339,838 18,989 106,428 404,425 148,617 288,905 7,070,075
13 15 14
15,824,321 172,002 172,002
3,019,217 25,970 28,587 3,073,774
16 17
4,514,528 15,348 (814,809) 3,715,067
4,514,528 1,843 (520,070) 3,996,3011
19,711,390
7,070,075
Notes 5 6 7 8 9 10 11 12 15
LIABILITIES Deposits from customers Deferred income tax Other liabilities Total liabilities SHAREHOLDERS` EQUITY Share capital Regulatory reserves Retained earnings Total shareholder's equity Total liabilities and equity
The notes on pages 57 to 101 form an integral part of these financial statements. The financial statements on pages 53 to 56 were approved by the Board of Directors on 27th March 2015 and were signed on its behalf by:
………………………. Chairman
th
10 April 2015 Date…………..…..…
………………..…..….… Managing Director
th
10 April 2015 Date…………………
The independent auditor`s report is on pages 51 and 52.
Annual Report 2014 Taarifa ya Mwaka
53
Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2014 Notes
2014 12 months TZS`000
2013 4 months TZS`000
Interest income Interest expense Net interest income Loan impairment charges Net interest income after impairment
18 19
1,508,385 (257,212) 1,251,173 (94,778) 1,156,395
519,864 (4,495) 515,369 515,369
Fees and commission income Fees and commission expense Net fees and commission income
20 20
390,714 (12,209) 378,505
55,816 (1,823) 53,593
1,534,900
569,362
12,918 (761,144) (1,107,448) (1,855,674)
812 (207,876) (854,556) (1,061,620)
(320,774) 39,540 (281,234) (281,234)
(492,258) (25,970) (518,228) (518,228)
(31.16)
(57.4)
Total operating income Foreign exchange income Staff costs General and administration costs Operating expenses
21 22 23
Loss for the year before tax Income tax expense Loss for the year Other comprehensive income Comprehensive loss for the year
24
Basic and diluted earnings per share
25
The notes on pages 57 to 101 form an integral part of these financial statements. The financial statements on pages 53 to 56 were approved by the Board of Directors on 27th March 2015 and were signedon its behalf by:
………………………. Chairman
th
10 April 2015 Date…………..…..…
………………..…..….… Managing Director
The independent auditor`s report is on pages 51 and 52.
54
Annual Report 2014 Taarifa ya Mwaka
th
10 April 2015 Date…………………
Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2014 Share capital TZS`000
Retained earnings TZS`000
Regulatory reserve TZS`000
TZS`000
4,514,528
-
-
4,514,528
Transfer to regulatory reserves
-
(1,843)
1,843
-
Loss for the year At 31 December 2013
-
(518,227)
-
(518,227)
4,514,528
(520,070)
1,843
3,996,3013 01
4,514,528,
(520,070)
1,843
3,996,301,30 1
Transfer to regulatory reserves
-
(13,505)
13,505
-
Loss for the year At 31 December 2014
-
(281,234)
-
(281,234)
4,514,528
(814,809)
15,348
3,715,067
Paid up share capital
Total
At 1 January 2014
The notes on pages 57 to 101 form an integral part of these financial statements. The financial statements on pages 53 to 56 were approved by the Board of Directors on 27th March 2015 and were signed on its behalf by:
………………………. Chairman
th
10 April 2015 Date…………..…..…
………………..…..….… Managing Director
th
10 April 2015 Date…………………
The independent auditor`s report is on pages 51 and 52.
Annual Report 2014 Taarifa ya Mwaka
55
Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2014 Notes
Cash flows from operating activities Loss for the year before tax Adjustments for: Depreciation of property and equipment
10 11
Amortization of intangible assets
12
2014 12 months TZS
2013 4 months TZS
(320,774)
(492,258)
116,133 58,910
35,136 18,396
31,622
36,113
(114,109)
(402,613)
(6,311,049)
(1,339,838)
3,753 (6,315,094)
(18,988) (300,000)
(132,357)
(106,428)
12,805,104 (1,228,500)
3,019,216 (50,000)
143,416
28,587
(1,148,836)
829,936
10 11
(56,301)
(439,561)
12
(77,834)
(167,013)
(27,951) (162,086)
(325,018) (931,592)
Paid up share capital
-
4,514,528
Net cash flows generated from financing activities
-
4,514,528
(1,310,922) 4,412,872
4,412,872 -
3,101,950
4,412,872
Amortization of leasehold improvements
Increase in loans and advances Decrease/(Increase) in inventories Increase in placements with other banks Increase in other assets Increase in customer's deposits Statutory minimum reserve Increase in other liabilities Net cash flows generated from operating activities Cash flows used in investing activities Acquisition of property and equipment Acquisition of intangible assets Leasehold improvements costs incurred Net cash flows used in investing activities Cash flows from financing activities
Net increase in cash and cash equivalent Cash and cash equivalents beginning of period Cash and cash equivalents end of year
31
The notes on pages 57 to 101 form an integral part of these financial statements. The financial statements on pages 53 to 56 were approved by the Board of Directors on 27th March 2015 and were signed on its behalf by:
………………………. Chairman
10th April 2015 Date…………..…..…
………………..…..….… Managing Director
The independent auditor`s report is on pages 51 and 52.
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Annual Report 2014 Taarifa ya Mwaka
10th April 2015 Date…………………
Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 1. REPORTING ENTITY Maendeleo Bank PLC is a public limited company established under Companies Act No. 2 of 2002 with Certificate of Incorporation No. 81006 and domiciled in the United Republic of Tanzania. The shareholding structure comprises various church institutions, Individuals, ELCT-Eastern and Coastal Diocese and United Evangelical Mission. The Bank is engaged in the business of banking and provision of related services. The address of the registered office is: Luther House Sokoine Drive PO Box 216 Dar es Salaam The Bank`s shares are listed on the Dar es Salaam Stock Exchange (DSE). 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all periods presented, unless otherwise stated. 2.1
Statement of compliance
These financial statements have been prepared in conformity with International Financial Reporting Standards (IFRS). 2.2 Basis of preparation The Bank’s financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS). Additional information required by the Tanzania Companies Act 2002 and the Banking and Financial Institution Act, 2006 were included where appropriate. The financial statements comprise statement of profit or loss and other comprehensive income, statement of financial position, statement of changes in equity, statement of cash flows and the notes. The measurement basis applied in the preparation of these financial statements is the historical cost basis, except where otherwise stated in the accounting policies below. The financial statements are presented in Tanzania shillings (TZS) and the amounts are rounded to the nearest thousand shillings. The preparation of financial statements in accordance with IFRS requires the use of certain critical accounting estimates. It also requires the Directors to exercise judgement in the process of applying the Bank’s accounting policies. Changes in assumptions may have a significant impact on the financial statements in the period the assumptions changed. The Directors believe that the underlying assumptions are appropriate and that the Bank’s financial statements therefore present the financial position and results fairly. The areas involving a higher degree of judgement, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 3.
Annual Report 2014 Taarifa ya Mwaka
57
Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 (CONTINUED) 2.3 Improvements to IFRSs New and revised IFRSs mandatorily effective at the end of the reporting period with no material effect on the reported amounts and disclosures in the current or prior year The following new or revised IFRSs were mandatorily effective and adopted by Maendeleo Bank PLC as at the end of the reporting period, but did not have a material effect on the current or previously reported financial performance or financial position. Name of standard Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32)
Recoverable Amount Disclosures for NonFinancial Assets (Amendments to IAS 36)
Novation of Derivatives and Continuation of Hedge Accounting (Amendments to IAS 39)
Details of the changes Amends IAS 32 Financial Instruments: Presentation to clarify certain aspects because of diversity in application of the requirements on offsetting, focused on four main areas: • the meaning of 'currently has a legally enforceable right of set-off' • the application of simultaneous realisation and settlement • the offsetting of collateral amounts the unit of account for applying the offsetting requirements. Applicable to annual periods beginning on or after 1 January 2014 Amends IAS 36 Impairment of Assets to reduce the circumstances in which the recoverable amount of assets or cash-generating units is required to be disclosed, clarify the disclosures required, and to introduce an explicit requirement to disclose the discount rate used in determining impairment (or reversals) where recoverable amount (based on fair value less costs of disposal) is determined using a present value technique. Applicable to annual periods beginning on or after 1 January 2014 Amends IAS 39 Financial Instruments: Recognition and Measurement to make it clear that there is no need to discontinue hedge accounting if a hedging derivative is novated, provided certain criteria are met. A novation indicates an event where the original parties to a derivative agree that one or more clearing counterparties replace their original counterparty to become the new counterparty to each of the parties. In order to apply the amendments and continue hedge accounting, novation to a central counterparty (CCP) must happen as a consequence of laws or regulations or the introduction of laws or regulations. Applicable to annual periods beginning on or after 1 January 2014
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Annual Report 2014 Taarifa ya Mwaka
Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 (CONTINUED) i. Standards and interpretations in issue but not yet effective At the reporting date, the following new and/or revised accounting standards and interpretations were in issue but not yet effective and therefore have not been applied in these financial statements. Maendeleo Bank PLC has not yet assessed the impact of these changes on their financial statements when they become effective: Name of standard IFRS 7 – Financial Instruments: Disclosures IFRS 9 - Financial Instruments
Defined Benefit Plans: Employee Contributions (Amendments to IAS 19)
Accounting for Acquisitions of Interests in Joint Operations (Amendments to IFRS 11)
Clarification of Acceptable Methods of Depreciation and Amortisation (Amendments to IAS 16 and IAS 38)
Changes made to the standard Amendments requiring disclosures about the initial application of IFRS 9. (Effective for annual periods beginning on 1 January 2015). Classification and measurement of financial assets (Effective for annual periods beginning on 1 January 2015). Accounting for financial liabilities and de-recognition. (Effect for annual periods beginning on or after 1 January 2015) Amends IAS 19 Employee Benefits to clarify the requirements that relate to how contributions from employees or third parties that are linked to service should be attributed to periods of service. In addition, it permits a practical expedient if the amount of the contributions is independent of the number of years of service, in those contributions, can, but are not required, to be recognised as a reduction in the service cost in the period in which the related service is rendered. Applicable to annual periods beginning on or after 1 July 2014 Amends IFRS 11 Joint Arrangements to require an acquirer of an interest in a joint operation in which the activity constitutes a business (as defined in IFRS 3 Business Combinations) to: apply all of the business combinations accounting principles in IFRS 3 and other IFRSs, except for those principles that conflict with the guidance in IFRS 11 disclose the information required by IFRS 3 and other IFRSs for business combinations. The amendments apply both to the initial acquisition of an interest in joint operation, and the acquisition of an additional interest in a joint operation (in the latter case, previously held interests are not remeasured). Applicable to annual periods beginning on or after 1 January 2016 Amends IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets to: clarify that a depreciation method that is based on revenue that is generated by an activity that includes the use of an asset is not appropriate for property, plant and equipment • introduce a rebuttable presumption that an Annual Report 2014 Taarifa ya Mwaka
59
Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 (CONTINUED) Name of standard
Bearer Plants (Amendments to IAS 16 and IAS 41)
IFRS 9 Financial Instruments
60
Annual Report 2014 Taarifa ya Mwaka
Changes made to the standard amortisation method that is based on the revenue generated by an activity that includes the use of an intangible asset is inappropriate, which can only be overcome in limited circumstances where the intangible asset is expressed as a measure of revenue, or when it can be demonstrated that revenue and the consumption of the economic benefits of the intangible asset are highly correlated • add guidance that expected future reductions in the selling price of an item that was produced using an asset could indicate the expectation of technological or commercial obsolescence of the asset, which, in turn, might reflect a reduction of the future economic benefits embodied in the asset. Applicable to annual periods beginning on or after 1 January 2016 Amends IAS 16 Property, Plant and Equipment and IAS 41 Agriculture to: • include 'bearer plants' within the scope of IAS 16 rather than IAS 41, allowing such assets to be accounted for a property, plant and equipment and measured after initial recognition on a cost or revaluation basis in accordance with IAS 16 • introduce a definition of 'bearer plants' as a living plant that is used in the production or supply of agricultural produce, is expected to bear produce for more than one period and has a remote likelihood of being sold as agricultural produce, except for incidental scrap sales • clarify that produce growing on bearer plants remains within the scope of IAS 41 Applicable to annual periods beginning on or after 1 January 2016 A finalised version of IFRS 9 which contains accounting requirements for financial instruments, replacing IAS 39 Financial Instruments: Recognition and Measurement. The standard contains requirements in the following areas: Classification and measurement. Financial assets are classified by reference to the business model within which they are held and their contractual cash flow characteristics. The 2014 version of IFRS 9 introduces a 'fair value through other comprehensive income' category for certain debt instruments. Financial liabilities are classified in a similar manner to under IAS 39, however there are differences in the requirements applying to the measurement of an entity's own credit
Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 (CONTINUED) Name of standard
IFRS 14 Regulatory Deferral Accounts
IFRS 15 Revenue from Contracts with Customers
Changes made to the standard risk. Impairment. The 2014 version of IFRS 9 introduces an 'expected credit loss' model for the measurement of the impairment of financial assets, so it is no longer necessary for a credit event to have occurred before a credit loss is recognized. Hedge accounting. Introduces a new hedge accounting model that is designed to be more closely aligned with how entities undertake risk management activities when hedging financial and non-financial risk exposures. Derecognition. The requirements for the derecognition of financial assets and liabilities are carried forward from IAS 39. Effective for annual period beginning on or after 1 January 2018. IFRS 14 permits an entity which is a first-time adopter of International Financial Reporting Standards to continue to account, with some limited changes, for 'regulatory deferral account balances' in accordance with its previous GAAP, both on initial adoption of IFRS and in subsequent financial statements. Applicable to an entity's first annual IFRS financial statements for a period beginning on or after 1 January 2016 IFRS 15 provides a single, principles based five-step model to be applied to all contracts with customers. The five steps in the model are as follows: • Identify the contract with the customer • Identify the performance obligations in the contract • Determine the transaction price • Allocate the transaction price to the performance obligations in the contracts Recognise revenue when (or as) the entity satisfies a performance obligation. Applicable to an entity's first annual IFRS financial statements for a period beginning on or after 1 January 2017
2.4 Interest income and expense Interest income and expenses are recognized in the statement of profit or loss and other comprehensive income for all interest bearing instruments on an accrual basis using the effective interest method, based on the actual purchase price. The effective interest rate method is a method of calculating the amortized cost of financial assets or a financial liability and of allocating the interest or interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument or, when appropriate, a shorter period to the net carrying amount of the financial asset or financial liability. Annual Report 2014 Taarifa ya Mwaka
61
Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 (CONTINUED) Interest on loans and advances given is recognized in the statement of profit or loss and other comprehensive income on accrual basis. However, interest accrued on overdue loans and advances is suspended as unrealized income, which can only be recognized as income when actually received. 2.5 Fees and commission income Fees and commissions are generally recognized on an accrual basis when the service has been provided or significant act has been performed. Loan commitment fees for loans that are likely to be drawn down are deferred (together with related direct costs) and recognized as adjustment to the effective interest rate on the loan. Commission and fees arising from negotiating or participating in the negotiation of, a transaction for a third party –such as arrangement of the acquisition of shares or other securities or the purchase or sale of business are recognized on completion of the underlying transaction. 2.6
Foreign currency translations
i. Functional and presentation currency Items included in the Bank’s financial statements are measured using the currency of the primary economic environment in which the entity operates, Tanzania Shillings (“the functional currency”). The financial statements are presented in Tanzania Shillings (TZS) rounded to the nearest thousand shilling, which is the bank`s functional and presentation currency. ii. Transactions and balances Foreign currency transactions are translated into Tanzania Shilling, the functional currency, using the exchange rates prevailing at the dates of the transactions. Monetary items denominated in foreign currency are translated with the closing rate as at the reporting date. Non-monetary items measured at historical cost denominated in a foreign currency are translated with the exchange rate as at the date of initial recognition; nonmonetary items in a foreign currency that are measured at fair value are translated using the exchange rates at the date when the fair value was determined. Foreign exchange gains and losses resulting from the settlement of foreign currency transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in statement of profit or loss and other comprehensive income. Changes in the fair value of monetary assets denominated in foreign currency classified as available-forsale are analyzed between translation differences resulting from changes in the amortized cost of the security and other changes in the carrying amount of the security. Translation differences related to changes in the amortized cost are recognized in profit or loss, and other changes in the carrying amount, are recognized in other comprehensive income. Translation differences on non-monetary financial instruments, such as equities held at fair value through profit or loss, are reported as part of the fair value gain or loss. Translation differences on nonmonetary financial instruments, such as equities classified as available-for-sale financial assets, are included in other comprehensive income.
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Annual Report 2014 Taarifa ya Mwaka
Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 (CONTINUED) 2.7 Financial assets Financial assets are any assets that is cash, a contractual right to receive cash or another financi al asset from another financial institution, a contractual right to exchange financial instrument with another institution under conditions that are potentially favourable or equity instrument of another enterprise. The Bank classifies its financial assets in the following categories:- Financial assets at fair value through statement of comprehensive income; loans and receivables; held-to-maturity investments; and available-for-sale financial assets. Management determines the classification of its investments at initial recognition. i. Financial asset at fair value through statement of comprehensive income This category has two sub categories; financial asset held for trading and those designated at fair value through statement of comprehensive income at inception. Financial asset is classified in this category if acquired primarily for the purpose of selling in the short term or if so designated by management. Derivatives are also categorized as held for trading unless they are designated as hedges. The Bank’s only and listed equity investment will be designated as financial asset through statement of comprehensive income. ii. Loans and receivables Loans and receivables are non- derivative financial assets with fixed or determinable payments that are not quoted on the stock exchange. They arise when the Bank advances money to borrowers, or provides services directly to a debtor with no intention of trading the receivables. iii. Held-to-maturity Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Bank’s management has the positive intention and ability to hold to maturity. Where the Bank decides to sell other than an insignificant amount of held-to-maturity assets, the entire category would be tainted and reclassified as available for sale. Held-to-maturity securities are carried at amortized cost using the effective interest method less impairment loss. Interest calculated using the effective interest method is recognized in the statement of comprehensive income. Government securities and bonds are classified as held to maturity investments and stated at amortized cost. iv. Available-for-sale Available-for-sale investments are those intended to be held for an indefinite period of time, which may be sold in response to needs for liquidity or changes in interest rates, exchange rates or equity prices. Available-for-sale financial assets are subsequently carried at fair value based on amounts derived from cash flow models. Gains and losses arising from changes in the fair value of available- for-sale financial assets are recognized directly in equity until the financial asset is derecognized or impaired at which time the cumulative gain or loss previously recognized in equity should be recognized in profit or loss. The fair values of quoted investments in active markets are based on current bid prices. Unlisted equity securities for which fair values cannot be measured reliably are recognized at cost less impairment loss. Dividends on available-for-sale equity instruments are recognized in the statement of comprehensive income when the Bank’s right to receive payment is established. 2.8 Recognition of financial assets Financial assets are initially recognized at fair value through profit or loss. Financial assets are derecognized when the right to receive cash flows from the financial assets have expired or when the bank has transferred substantially all risks and rewards of ownership. Annual Report 2014 Taarifa ya Mwaka
63
Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 (CONTINUED) 2.9 Loans and provisions for loan impairment Loans originated by the Bank by providing money directly to the borrowers are categorized as originated loans and are stated at amortized cost less provision for impairment. A loss provision is established when there is doubt about the Bank’s ability to recover all amounts due. The amount of the provision is the difference between the estimated recoverable amount and the carrying amount, but also takes into account the requirements of Management of Risk Assets Regulations, 2001 issued by the Bank of Tanzania. In the event that the provision required under the BOT Regulations exceeds that required by IFRS, the excess provision would be treated as a general banking provision and accounted for in reserves. 2.10 Financial liabilities Financial liabilities are initially recognised at fair value and subsequently measured at amortised cost. Financial liabilities are derecognised when extinguished. Such financial liabilities include deposits from banks or customers and other liabilities. 2.11 Derecognition of financial assets and liabilities Financial assets are derecognised when the contractual rights to receive the cash flows from these assets have ceased to exist or the assets have been transferred and substantially all the risks and rewards of ownership of the assets are also transferred (that is, if substantially all the risks and rewards have been transferred, the Bank tests control to ensure that continuing involvement on the basis of any retained powers of control does not prevent derecognition). Financial liabilities are derecognised when they have been redeemed or otherwise extinguished. 2.12 Classes of financial instruments The Bank classifies the financial instruments into classes that reflect the nature of information and take into account the characteristics of those financial instruments. The classification made can be seen on the table below: Item on balance sheet Financial assets Cash and cash equivalents Loans and advances to banks Loans and advances to customer Placements in other banks Other assets Financial liabilities Deposits from banks Deposits from customers Other liabilities
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Annual Report 2014 Taarifa ya Mwaka
Class Loans and receivables Loans and receivables Loans and receivables Held to maturity Loans and receivables Financial liabilities at amortised cost Financial liabilities at amortised cost Financial liabilities at amortised cost
Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 (CONTINUED) 2.13
Impairment of financial assets
i. Assets carried at amortised cost The Bank assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred if, and only if, there is objective evidence of impairment as a result of one or more events that occurred after initial recognition of the asset (a “loss event”) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated. The criteria that the Bank uses to determine that there is objective evidence of an impairment loss include: • • • • • • •
Significant financial difficult of the issuer or obligor; A breach of contract, such as a default or delinquency in interest or principal payment; Cash flow difficulties experienced by the borrower; Breach of loan covenants or conditions; Initiation of bankruptcy proceedings; Deterioration of the borrower’s competitive position; and Deterioration in the value of collateral.
The estimated period between a loss occurring and its identification is determined by management for each identified portfolio. In general, the periods used vary between three months and twelve months; in exceptional cases, longer periods are warranted. The Bank first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, and individually or collectively for financial assets that are not individually significant. If the Bank determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which impairment loss is or continues to be recognised are not included in a collective assessment of impairment. The amount of the loss is measured as the difference between the assets carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective 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 profit and loss account. When a loan is uncollectible, it is written off against the related provision for loan impairment. Such loans are written off after all the necessary procedures have been completed and the amount of the loss has been determined. If, in subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor’s credit rating), the previously recognised impairment loss is revised by adjusting the allowance account. The amount of the reversal is recognised in the profit and loss account in impairment charge for credit losses. Annual Report 2014 Taarifa ya Mwaka
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Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 (CONTINUED) ii. Assets classified as available-for-sale The Bank assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired. In the case of equity investments classified as available for sale, a significant or prolonged decline in the fair value of the security below its cost is objective evidence of impairment resulting in the recognition of an impairment loss. If any such evidence exists for availablefor-sale financial assets, the cumulative loss – measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss – is removed from equity and recognised in the profit and loss account. Impairment losses recognised in the profit and loss account on equity instruments are not reversed through the profit and loss account. If, in a subsequent period, the fair value of a debt instrument classified as available for sale increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed through the profit and loss account. iii. Renegotiated loans Loans that are either subject to collective impairment assessment or individually significant and whose terms have been renegotiated are no longer considered to be past due but are treated as new loans. In subsequent years, the asset is considered to be past due and disclosed only if renegotiable gain. 2.14 Offsetting financial instruments Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously. 2.15 Impairment of non-financial assets Assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). The impairment test also can be performed on a single asset when the fair value less cost to sell or the value in use can be determined reliably. Non-financial assets that suffered impairment are reviewed for possible reversal of the impairment at each reporting date. No non-financial assets were impaired . 2.16 Income tax Income tax expense is the aggregate of the charge to the profit and loss account in respect of current income tax and deferred income tax. Current income tax is the amount of income tax payable on the taxable profit for the period determined in accordance with the Tanzanian Income Tax Act. Deferred income tax is provided in full, using the liability method, for all temporary differences arising between the tax bases of assets and liabilities and their carrying values for financial reporting purposes. However, if the deferred income tax arises from the initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit/loss, it is not accounted for. Deferred income tax is determined using tax rates and laws that have been enacted or substantively enacted at the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
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Annual Report 2014 Taarifa ya Mwaka
Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 (CONTINUED) Deferred income tax assets are recognised only to the extent that it is probable that future taxable profits will be available against which temporary differences can be utilised. 2.17 Provisions Provisions are recognised when the Bank has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as interest expense. 2.18
Property and equipment
i. Recognition and measurement Items of property and equipment are stated measured at historical cost less any accumulated depreciation less any accumulated impairment loss. Cost includes expenditure that is directly attributable to the acquisition of the items. Initial estimate of dismasting/removal costs (as obligation arises); finance cost may arise if credit price is greater than cash price. Capitalization of increased liability due to adverse exchange rate movement is not allowed. The cost of self-constructed includes cost of materials, direct labour, any other costs directly attributable to bringing the assets to a working condition for their intended use, the initial estimate of costs of dismantling and removing the items and restoring the site on which they are located (as obligation arises) and capitalised borrowing costs, finance costs that may arise if credit price is greater than cash price. Capitalization of increased liability due to adverse exchange rate movement is not allowed. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment. ii. Subsequent costs Subsequent costs are included in the asset’s carrying amount or are recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with item will flow to the Bank and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the statement of comprehensive income during the financial period in which they are incurred. iii. Depreciation Depreciation is recognized in profit or loss on a straight line basis over the estimated useful lives of each part of an item of calculated to write off the cost of the Property and Equipment since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset on straight line method. Annual Report 2014 Taarifa ya Mwaka
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Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 (CONTINUED) The principal rates to be used per annum for the purpose of depreciation shall be as follows: Assets Particulars ATM and Generator Motor vehicles Office machines and equipment (including CCTV cameras) Furniture and fittings Computer equipment Leasehold improvements
Annual Rate % 20 25 25 25 33.3 33.3
Depreciation charge starts when Property and Equipment is ready for use. Depreciation charge ceases when the Property and Equipment is disposed off or derecognized. The asset’s residual values and useful lives are reviewed and adjusted if appropriate, at each statement of financial position date. In practice, the residual values of assets are insignificant and, therefore, immaterial in the calculation of the depreciable amount. Assets that are subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. The recoverable amount is the higher of the asset’s fair value less costs to sell and value in use. iv. Derecognition Property and equipment is derecognised on disposal or when no future economic benefits are expected from its use. The gain or loss on disposal is determined by comparing proceeds from the disposal with carrying amount of the item of property and equipment. Any gain or loss arising on derecognition of the asset are recognised net within other income in statement of profit or loss or other comprehensive in the year the asset is derecognised. Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the statement of comprehensive income Rehabilitation costs are capitalized on the basis of the cost incurred for rehabilitation of rented buildings. The bank will amortize these costs on the basis of the expected useful life of ten years using straight line method. 2.19
Intangible Assets – software costs
Costs associated with maintaining computer software programs are recognized as an expense as incurred. Costs that are directly associated with the production or procurement of identifiable and unique software products controlled by the bank, and that will probably generate economic benefits exceeding costs beyond one year, are recognized as intangible assets. Acquired computer software licenses are capitalized on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortized on a straight line basis over the expected useful life of three years (at the rate of 33.3% per year).
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Annual Report 2014 Taarifa ya Mwaka
Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 (CONTINUED) Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. 2.20
Employee benefits
Retirement benefit obligations The Bank has a statutory requirement to contribute to the pension fund preferred by employees, which is a defined contribution scheme. The Bank contributes 10% of the required 20% of gross emoluments to the scheme and the contributions are recognised as an expense in the period to which they relate. The remaining 10% is deducted from employees emoluments. The Bank has no legal or constructive obligation to pay further contributions if PPF does not hold sufficient assets to pay all employees the benefit relating to the employees service in the current and prior periods. 2.21 Share capital Ordinary shares are classified as ‘share capital’ in equity. Any premium received over and above the par value of the shares is classified as ‘share premium’ in equity. Incremental costs directly attributable to the issue of new shares or options or to the acquisition of a business are shown in equity as a deduction, net of tax, from the proceeds. 2.22 Leases Leases in which a significant portion of the risks and rewards of ownership are retained by another party, the lessor, are classified as operating leases. Payments, including pre-payments, made under operating leases (net of any incentives received from the lessor) are charged to the statement of profit or loss and other comprehensive income on a straight-line basis over the period of the lease. The leases entered into by the bank are operating leases. The total payments made under operating leases are charged to other operating expenses in the statement of profit or loss and other comprehensive income on a straight-line basis over the period of the lease. When an operating lease is terminated before the lease period has expired, any payment required to be made to the lessor by way of penalty is recognised as an expense in the period in which termination takes place. 2.23 Contingencies and commitments Transactions are classified as contingencies where the bank’s obligations depend on uncertain future events. Items are classified as commitments where the bank commits itself to future transactions if the items will result in the acquisition of assets. 2.24
Inventories
Inventories are valued at the lower of cost and net realizable value. Cost is determined on a first in first out basis. Any obsolete items are provided for in full in the year they are detected. 2.25
Cash and cash equivalents
For the purposes of statement of cash flows, cash and cash equivalents comprise of balances less than three months’ maturity from the date of acquisition, including cash and non-restricted balances with the Bank of Tanzania, treasury bills and other eligible bills, loans and advances to banks, amounts due from other banks and short-term Government securities. Cash and cash equivalents excludes the cash reserve requirement held with Bank of Tanzania. Annual Report 2014 Taarifa ya Mwaka
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Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 (CONTINUED) 2.26 Dividends The dividend distribution to the Bank’s Shareholders shall be recognized as a liability in the Bank’s financial statements in the period in which the dividends are approved by bank’s shareholders. 3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING ACCOUNTING POLICIES The Bank makes estimates and assumptions that affect the reported amounts of assets and liabilities within the next period. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Bank’s accounting policies. 3.1 Impairment losses on loans and advances The Bank reviews its loan portfolio on quarterly basis to assess impairment. In determining whether an impairment loss should be recorded in the statement of profit or loss and other comprehensive income, the Bank makes judgments as to whether there is any observable data indicating that there is a measurable decrease in the estimated future cash flows from a portfolio of loans before the decrease can be identified with an individual loan in that portfolio. Judgments may also change with time as new information becomes available. This evidence may include observable data indicating that there has been an adverse change in the payment status of borrowers in a group, or economic conditions that correlate with defaults on assets in the Bank. The nature and carrying values of the loans and advances are disclosed in the Note 7 to the financial statements. 3.2 Income taxes Significant estimates are required in determining the provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. Where the final tax outcome is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made. 3.3 Property and equipment Critical estimates are made by the Directors in determining depreciation rates for property and equipment. The rates used are set out in Note (2.17) above. 3.4 Useful lives The useful lives of items of property and equipment have been estimated annually and are in line with the rate at which they are depreciated. 3.5 Critical judgements in applying the entity’s accounting policies In the process of applying the bank’s accounting policies, management has made judgements in determining whether assets are impaired or not.
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Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 (CONTINUED) 4.
FINANCIAL RISK MANAGEMENT
Taking risk is core to the banking business, and the operational risks are inevitable consequence of being in business. The Bank’s aim is therefore to achieve an appropriate balance between risk and return and minimise potential adverse effects on the Bank’s financial performance. Risk management is coordinated by the Credit Management Committee under policies approved by the Board of Directors. The Board provides written principles for overall risk management, as well as written policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, and liquidity risk. In addition, internal audit is responsible for the independent review of risk management and the control environment. The most important risks are credit risk, liquidity risk and market risk. 4.1
Credit risk
The Bank takes on exposure to credit risk, which is the risk that the counterparty will cause a financial loss to the Bank by failing to discharge an obligation. Credit risk is the most important risk for the Bank`s business. Management therefore, carefully manages its exposure to the credit risk. Credit exposures arise principally in lending activities that led to loans and advances, and investment activities that bring debt securities and other bills into the Bank`s asset portfolio. There is also credit risk in off-balance sheet financial instruments, such as loans commitments. The credit risk management and control are centralized in the credit risk management team of the Bank and reported to the Board of Directors and heads of department regularly. 4.1.1 Credit risk measures Loans and advances In measuring credit risk of loans and advances to customers and banks at a counterparty level, the Bank reflects three components: (i) the ‘probability of default’ by the client or counterparty on its contractual obligations; (ii) current exposures to the counterparty and its likely future development, from which the Bank derive the ‘exposure at default’; and (iii) the likely recovery ratio on the defaulted obligations (the ‘loss given default’). These credit risk measurements, which reflect expected loss (the ‘expected loss model’), required by Basel Committee on Banking Regulations and the supervisors Banks (the Basel Committee) and are embedded in the Bank’s daily operational management. The operational measurements can be contrasted with impairment allowances required under IAS 39, which are based on losses that have been incurred at the balance sheet date (the ‘incurred loss model’) rather than expected losses. Exposure at default is based on the amounts the Bank expects to be owed at the time of default. For example, for a loan this is the face value. For a commitment, the Bank includes any amount already drawn plus the further amount that may have been drawn by the time of default, should it occur. The Bank assesses the probability of default of individual counterparties using internal rating tools tailored to various categories of counterparty in line with the Bank of Tanzania guidelines. For regulatory purposes and for internal monitoring of the quality of the loan portfolio, all customers are segmented into five rating classes as shown below:
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Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 (CONTINUED) Traditional loans (loans other than microfinance loans) Classification Current Especially mentioned Substandard Doubtful Loss/bad
Past due (Days) 0-60 61-90 91-180 181-270 271-
Provisioning rate Nil 5% 10% 50% 100%
Past due (Days) 0 1-30 31-60 61-90 91-180
Provisioning rate 2% 25% 50% 75% 100%
Microfinance Loans Classification Current Especially mentioned Substandard Doubtful Loss/bad
4.1.2 Risk limit control and mitigation policies Lending limits The Bank manages limits and controls concentrations of credit risk wherever they are identified, in particular, to individual counterparties and groups, and to industries. The Bank structures the levels of credit risk it undertakes by placing limits on the amount of risk accepted in relation to one borrower, or groups of borrowers, and to industry segments. Such risks are monitored on a revolving basis and subject to an annual or more frequent review, when considered necessary. The exposure to any one borrower including banks is further restricted by sub-limits covering on and off balance sheet exposures. Actual exposures against limits are monitored daily. Exposure to credit risk is also managed through regular analysis of the ability of borrowers and potential borrowers to meet interest and capital repayment obligations and by changing these lending limits where appropriate. Credit related commitments The primary purpose of these instruments is to ensure that funds are available to a customer as required. Guarantees and standby letters of credit carry the same credit risks as loans. Documentary and commercial letters of credit - which are written undertakings by the Bank up to a stipulated amount under specific terms and conditions – are collateralised by the underlying shipments of goods to which they relate and therefore carry less risk than a direct loan. Commitments to extend credit represent unused portions of authorisation to extend credit in the form of loans, guarantees or letters of credit. With respect to credit risk on commitments to extend credit, the Bank is potentially exposed to loss in an amount equal to the total unused commitments. However, the likely amount of loss is less than the total unused commitments, as most commitments to extend credit are contingent upon customers maintaining specific credit standards. The Bank monitors the term to
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Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 (CONTINUED) maturity of credit commitments because longer term commitments generally have a greater degree of credit risk than shorter-term commitments. Collateral The Bank employs a range of policies and practices to mitigate credit risk. The most traditional of these is the taking of security for funds advanced, which is common practice. The Bank implements guidelines on the acceptability of specific classes of collateral or credit risk mitigation. The principal collateral types for loans and advances are: • Mortgages over residential properties; • Charges over business assets such as premises • inventory and accounts receivable; Corporate, small and medium enterprise, and micro enterprise loans are generally secured while salaried workers loans are unsecured. 4.1.3 Impairment and provisioning policies Impairment provisions are recognised for financial reporting purposes only for losses that have been incurred at the balance sheet date based on objective evidence of impairment. The impairment provisions shown in the statement of financial position at year end is calculated on the basis of the requirements of IAS 39 and is made up of the following: Categories
Solidarity Group Loan Micro Enterprise loans Small Medium Enterprise loans Salary Workers Loans Other loans
31 December 2014 Loans and Impairment advances provisions to customers TZS`000 205,308 204,808
TZS`000 34,758 11,562
2,408,387 2,793,885 2,133,277 7,745,665
45,366 3,092 94,778
31 December 2013 Loans and Impairment advances to provision customers TZS`000 TZS`000 92,189 27,745 360,000 637,794 222,110 1,339,838
-
In assessing the level of impairment, management determines whether objective evidence of impairment exists under IAS 39, based on the criteria detailed in Note 2.12. The Bank’s policy requires the review of individual financial assets that are above materiality thresholds at least annually or more regularly when individual circumstances require. Impairment allowances on individually assessed accounts are determined by an evaluation of the incurred loss at balance-sheet date on a case-by-case basis, and are applied to all individually significant accounts. The assessment normally encompasses collateral held (including re-confirmation of its enforceability) and the anticipated receipts for that individual account. Annual Report 2014 Taarifa ya Mwaka
73
Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 (CONTINUED) The regulatory provision is derived from each of the five rating classes as shown below:
Current Especially mentioned Sub-standard Doubtful Loss
31 December 2014 Loans and Impairment advances to provisions customers TZS`000 % 6,491,771 0.04% 1,057,007 5.61% 10.23% 161,365 61.52% 9,279 100% 26,243 7,745,665
4.1.4 Loans and advances Loans and advances are summarized as follows:
Neither past due nor impaired Past due but not impaired Impaired Gross Less allowance for impairment Net Portfolio allowance Individually impaired
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Annual Report 2014 Taarifa ya Mwaka
31 December 2013 Loans and Impairment advances to provisions customers TZS`000 % 1,339,838 1,339,838
2014 Loans and advances to customers TZS`000 6,577,348 705,995 462,322 7,745,665 (94,778) 7,650,887
2013 Loans and advances to customers TZS`000 1,339,838 -
94,778 94,778
-
1,339,838 1,339,838
Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 (CONTINUED) a) Loans and advances neither past due nor impaired The credit quality of the portfolio of loans and advances that were neither past due nor impaired can be assessed by reference to the internal system adopted by the Bank. Loans and advances that were neither past due no impaired can be analyzed as follows: 2014 TZS`000 Solidarity Group Loan Staff loans Small Medium Enterprise loans Salary Workers Loans Other loans
122,011 444,061 2,002,007 2,327,838 1,230,392 6,126,309
2013 TZS`000 92,189 27,745 360,000 637,794 222,110 1,339,838
b) Loans and advances individually impaired The breakdown of the gross amount of individually impaired loans and advances by class is as follows: 2014 2013 TZS`000 TZS`000 Solidarity Group Loan 191,668 Small Medium Enterprise loans 1,167,142 Salary Workers Loans 17,094 1,375,904 Repossessed collateral During the year, the bank did not obtain any asset by taking possession of collateral held as security. Repossessed properties are usually sold as soon as practicable, with the proceeds used to reduce the outstanding indebtedness. Concentration of loans and advances Concentrations of loans and advances within the customer loan portfolio are as shown below:
Group Lending Scheme Small Medium Enterprise Loans Salary Workers loans Micro Enterprise Loans Other loans Total
2014 TZS`000 205,308 2,408,387 2,793,885 204,808 2,133,277 7,745,665
% 2% 31% 36% 3% 28% 100%
2013 TZS`000 92,189 360,000 637,794 27,745 222,110 1,339,838
% 7% 27% 47% 3% 16% 100%
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Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 (CONTINUED) 4.2 Market risk The Bank takes on exposure to market risks, which is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risks arise from open positions in interest rate and currency, all of which are exposed to general and specific market movements and changes in the level of volatility of market rates or prices such as interest rates, credit spreads, and foreign exchange rates. The Bank separates exposures to market risk into either trading or non-trading portfolios. The market risks arising from trading and non-trading activities are concentrated in the Bank’s treasury department and monitored regularly. Regular reports are submitted to the Bank`s Asset and Liability Committee (ALCO) and heads of department. Trading portfolios include those positions arising from market-making transactions where the Bank acts as principal with clients or with the market. Non-trading portfolios primarily arise from the interest rate management of the Bank’s retail and corporate banking assets and liabilities. a. Foreign exchange risk The Bank takes on exposure to the effects of fluctuations in the prevailing foreign currency exchange rates on its financial position and cash flows. ALCO sets limits on the level of exposure by currency and in aggregate for both overnight and intra-day positions, which are monitored daily. The Bank had the following significant foreign currency exposure positions: At 31 December 2014 (All amounts are expressed in thousands of shillings) TZS
USD
EUR
Others
Total
2,328,152
198,407
8,835
1,772
2,537,166
8,190,258
178,389
89,731 -
-
8,458,378
7,650,887 15,236 238,785 18,423,318
376,796
98,566
1,772
7,650,887 15,236 238,785 18,900,452
14,822,561 172,002 14,994,563
898,333 898,333
103,428 103,428
-
15,824,322 172,002 15,996,324
3,428,755
(521,537)
(4,862)
1,772
2,904,128
Assets Cash and balances with Bank of Tanzania Balances with other banks Loans and advances to customers Inventories Other assets Liabilities Deposits from customers Other liabilities
Net balance sheet position
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Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 (CONTINUED) At 31 December 2013 (All expressed in thousands of shillings) TZS
USD
EUR
Total
532,227 4,128,938 1,339,838 18,988 106,428 6,126,4196,126,419
86,148 6,671 92,819
2,257 6, 631 8,888
620,632 4,142,241 1,339,838 18,988 106,428 6,228,127
Deposits from customers Other liabilities
2,914,392 28,587 2,942,979
80,284 80,284
24,540 24,540
3,019,217 28,587 3,047,804
Net balance sheet position
3,183,440
12,535
(15,652)
3,180,323
Assets Cash and balances with Bank of Tanzania Balances with other banks Loans and advances to customers Inventories Other assets Liabilities
4.3
Interest rate risk
Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Fair value interest rate risk is the risk that the value of a financial instrument will fluctuate because of changes in market interest rates. The Bank takes on exposure to the effects of fluctuations in the prevailing levels of market interest rates on both its fair value and cash flow risks. Interest margins may increase as a result of such changes but may reduce losses in the event that unexpected movements arise. The Bank’s Asset and Liability Committee (ALCO) sets limits on the level of mismatch of interest rate repricing that may be undertaken, which is monitored regularly by the Bank. The table below summarises the Bank’s exposure to interest rate risks. It includes the Bank’s financial instruments at carrying amounts, categorised by the earlier of contractual repricing or maturity dates. The Bank does not bear an interest rate risk on off balance sheet items.
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78
Annual Report 2014 Taarifa ya Mwaka 514,779
258,789
9,562,322
Total liabilities 414,779
1,812,000
1,812,000 -
-
657,902
4,450,000
4,450,000 -
5,107,902
204,808
4,903,094
Months TZS`000
7 – 12
-
-
6,672,511
-
-
6,672,511
6,672,511
Above 1 year Years TZS`000
This mismatch found in the first three months will be covered by excess found in the months between 6 and above.
Total interest rate re-pricing As At 31st December, 2014
(7,460,249 )
9,562,322 -
Other liabilities
2,226,779
1,712,000
1,843,284
2,102,073
-
Months TZS`000
Months TZS`000
-
4–6
1–3
Customer deposits
LIABILITIES
Total assets
Cash and balances with Bank of Tanzania Placements and balances with other banks Loans and advances to Customers
ASSETS
31 December 2014
INTEREST RATE SENSITIVITY GAP
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 (CONTINUED)
MAENDELEO BANK PLC FINANCIAL STATEMENTS
2,365,164
172,002
172,002
-
2,537,1667, 166
-
2,537,166
Bearing TZS`000
Non-interest
2,650,107
15,996,324
172,002
15,824,322
18,646,431
7,650,887
8,458,378
2,537,166
TZS`000
Total
Maendeleo Bank
TZS`000
TZS`000
1,882,200
1,777,624
-
(851,247)
1,241,592
-
1,241,592
390,345
3,659,824 1,777,624
90,345
300,000
118,348
3,541,476
-
Months
Months
-
4–6
1–3
!
152,786
-
-
-
152,786
152,786
-
-
TZS`000
Months
7 – 12
978,357
-
-
-
978,357
978,357
-
-
TZS`000
Above 1 year Years
892,809
28,587
28,587
921,396
-
300,764
620,632
TZS`000
Noninterest Bearing
3,054,908
3,047,803
28,587
3,019,216
6,102,711
1,339,838
4,142,241
620,632
TZS`000
Total
The mismatch deficit shown from 4 to 6 months will be covered by the excess liquidity which is available in the first three months as detailed in the table above.
Interest rate sensitivity gap as at 31 st December, 2013
Total liabilities
Other liabilities
Customer deposits
LIABILITIES
Loans and advances to customers Total assets
Balances with other Banks
Cash and balances with Bank of Tanzania
ASSETS
31 December 2013
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 (CONTINUED)
MAENDELEO BANK PLC FINANCIAL STATEMENTS
Maendeleo Bank
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Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 (CONTINUED) Fair value of financial assets and liabilities Financial instruments not measured at fair value The following table summarises the carrying amounts and fair values of those financial assets and liabilities not presented on the Bank’s balance sheet at their fair values: Carrying Amount TZS`000
Fair Value TZS`000
2,537,166 8,458,378 7,650,887 238,785
2,537,166 8,458,378 7,650,887 238,785
18,885,216
18,885,216
15,824,322 172,002 15,996,324
15,824,322 172,002 15,996,324
Carrying Amount TZS`000
Fair Value TZS`000
620,632 4,142,241
620,632 4,142,241
1,339,838 106,428 6,209,139
1,339,838 106,428 6,209,139
3,019,217 28,587 3,047,804
3,019,217 28,587 3,047,804
At 31 December 2014 Financial assets Cash and balances with Bank of Tanzania Balances with other banks Loans and advances to customers Other assets Liabilities Deposits from customers Other liabilities
At 31 December 2013 Financial assets Cash and balances with Bank of Tanzania Balances with other banks Loans and advances to customers Other assets Liabilities Deposits from customers Other liabilities
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Annual Report 2014 Taarifa ya Mwaka
Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 (CONTINUED) Most of the financial assets and liabilities are short term in nature and those which are long term bear interest at prevailing market rate, therefore the carrying amounts approximate fair value. Balances with other banks - The balance includes inter-bank placements, balances with other banks and items in the course of collection. Loans and advances to customers - The balance is net of impairment charges and includes all products offered by the bank such as MSE, SME, salaried workers loan, personal loans and overdrafts. Deposits from customers - The balance covers both retail and corporate customers. The estimated fair value of deposits with no stated maturity includes non- interest bearing deposits, is the amount repayable on demand. 4.4 Liquidity risk Liquidity risk is a risk that arises when the bank is unable to settle its maturing obligations due to scarcity of liquidity asset. The Bank manages the liquidity structure of assets, liabilities and commitments through various meetings held like Management Meeting where the liquidity status of the bank is discussed and strategies planned to rescue the risk from happening. If this risk is not well managed the bank will be put at a risk of ceasing its operations. Banking operations are such that mismatch of assets and liabilities according to their maturity profiles cannot be avoided. However, Management ensures that the mismatch is controlled in line with allowable risk levels. Liquidity is managed on a daily basis and incorporates assets and liabilities of the Bank based on the remaining period up to 31 December 2014 to the contractual maturity date and the Finance Manager is the focal person. The table below analyses assets and liabilities into relevant maturity groupings based on the remaining period at 31 December 2014 to the contractual maturity date.
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82
Annual Report 2014 Taarifa ya Mwaka
Maturity gap as at 31 December, 2013
Total
Other liabilities
Customer deposits
Financial liabilities
Total
Loans and advances to customers
Balances with other banks
Financial assets Cash and balances with Bank of Tanzania
31 December 2014
Liquidity risk analysis
(5,095,085)
9,906,326
172,002
9,734,324
258,789 4,639,239
1,843,284
2,537,166
414,779
1,812,000
-
1,812,000
514,779 2,226,779
1,712,000
-
TZS
Months
Months TZS
4–6
1–3
657,902
4,450,000
-
4,450,000
204,808 5,107,902
4,903,094
-
TZS
Months
7 – 12
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 (CONTINUED)
MAENDELEO BANK PLC FINANCIAL STATEMENTS
6,672,511
-
-
-
6,672,511 6,672,511
-
-
TZS
Years
1–3
2,650,107
4,622,002
172,002
4,450,000
7,650,887 18,646,431
8,458,378
2,537,166
TZS
Total
Maendeleo Bank
Maturity gap as at 31 December, 2014
Total
Other liabilities
Customer deposits
Financial liabilities
Total
Loans and advances to customers
Balances with other banks
Financial assets Cash and balances with Bank of Tanzania
31 December 2013
Liquidity risk analysis
2,775,009
1,806,211
1,777,624 28,587
118,348 4,581,220
3,842,240,
620,632
(851,247)
1,241,592
1,241,592 -
90,345 390,345
300,000
-
TZS`000
Months
Months TZS`000
4–6
1–3
152,786
-
-
152,786 152,786
-
-
TZS`000
Months
7 – 12
1–3
941,726
-
-
941,726 941,726
-
-
TZS`000
Years
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 (CONTINUED)
MAENDELEO BANK PLC FINANCIAL STATEMENTS
36,630
-
-
36,630 36,630
-
-
TZS`000
3 Years
Over
3,054,908
3,047,803
3,019,216 28,587
1,339,838 6,102,711
4,142,241
620,632
TZS`000
Total
Maendeleo Bank
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Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2014 (CONTINUED) The maturity gap analysis shows that the bank has favorable maturity in the first three months, followed by unfavorable maturities; however, the bank is determined to cover up the mismatches found by using favorable status in the first three months. The table below shows the liquidity position of the bank as at the end of the year 31 December 2014.
Total deposits Total liquid assets held Liquidity ratio Regulatory requirement
2014 TZS`000 15,564,638 3,318,998 21% 20%
2013 TZS`000 3,014,721 921,396 31% 20%
4.5 Capital management The Bank's objectives when managing capital, which is a broader concept than the 'equity' on the face of statement of financial position sheet, are: • to comply with the capital requirements set by the Bank of Tanzania • to safeguard the Bank’s ability as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders • to maintain a strong capital base to support the development of its business. 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 Bank of Tanzania for supervisory purposes. The required information is filed with Bank of Tanzania on a quarterly basis. The risk weighted assets are measured by means of a hierarchy, classified according to the nature and reflecting an estimate, of the credit risk associated with each assets and counter party. A similar treatment is adopted for off balance sheet exposure, with some adjustment to reflect the more contingent nature of the potential losses. The Bank manages its capital to meet Bank of Tanzania requirements listed below: • hold the minimum level of the regulatory capital of TZS 2 billion; • maintain core capital of not less than 10% of total deposit liabilities; and • maintain a ratio of total regulatory capital of not less than the internationally agreed 12% of risk-weighted assets (Basel ratio) plus risk-weighted off-balance sheet items. The regulatory capital as established by the Bank of Tanzania is divided into two tiers: • Tier 1 capital which includes ordinary share capital, retained earnings and reserves created by appropriations of retained earnings deduct prepaid expenses and deferred charges • Tier 2 capital (supplementary capital) which includes the general provisions.
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Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2014 (CONTINUED) During the period, the Bank has complied with all the imposed capital requirements of Bank of Tanzania to which the Bank is subject. The table below summarizes the composition of core capital of the bank 2014
2013
TZS`000
TZS`000
Paid up ordinary share capital
4,514,528
4,514,528
Retained earning
(814,809)
(520,070)
Sub total
3,699,719
3,994,458
Prepaid expenses
(120,766)
(63,492)
Intangible assets
(167,541)
(148,617)
Sub total
(288,307)
3,782,349)
Total capital (Tier 1)
3,411,412
3,782,347
-
-
3,411,412
3,782,347
On - balance sheet assets
9,938,279
2,611,566
Off – balance sheet assets
-
-
Total risk weighted assets
9,938,279
2,611,566
2014
2013
%
%
Tier 1 capital to total risk weighted assets
34
137
Total capital to total risk weighted assets
34
137
Tier 1 Capital
Deductions
Supplementary capital (Tier 2) Grand total (Tier 1 + Tier 2)
Risk weighted asset
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Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2014 (CONTINUED) The decrease of the regulatory capital in the 2014 is mainly due to the losses made during the year under review. 31 December 2014 Nominal Statement of Financial Statement of Financial Position Assets (Net) Weighted Position risk Amounts Risk TZS`000 TZS`000 Cash and balances with Bank of Tanzania 2,537,166 0% Balances with other banks
8,330,621
20%
1,666,124
127,757 -
50% 20%
63,878 -
7,650,887
100%
7,745665
Other assets
112,085
100%
112,085
Property and equipment
344,593
100%
344,593
Rehabilitation costs
285,234
0%
-
5,934
100%
Prepaid expenses (Deduction from core capital)
120,766
0%
5,934 -
Intangible assets (Deduction from core capital)
167,541
0%
-
Cheques and items for clearing Inter bank loans receivable Loans, advances and overdrafts
Inter branch float items Sundry receivables(Staff adv.& imp rests)
TOTAL
-
9,938,279
294,241
31 December 2013
Statement of Financial Position Assets Balances with Bank of Tanzania Balances with other banks Cheques and items for clearing Loans, advances and overdrafts Other assets Property, and equipment Rehabilitation costs Sundry receivables(Staff adv.& imp rests) Prepaid expenses (Deduction from core capital) Intangible assets (Deduction from core capital) TOTAL
86
Annual Report 2014 Taarifa ya Mwaka
Nominal Statement of Financial Position Amounts TZS`000 620,632 4,142,790 (549) 1,339,838 58,809 404,425 288,905 3,116 63,492 148,617 7,070,075
Risk %
Weighted risk TZS`000
20% 50% 100% 100% 100%
805,652 (274) 1,339,838 58,809 404,425 3,116 -
100% -
2,611,566
Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2014 (CONTINUED)
5.
CASH AND BALANCES WITH BANK OF TANZANIA Cash in hand Balances with Bank of Tanzania
Clearing account -local Clearing account - foreign Statutory minimum reserve
2014
2013
TZS`000 673,093
TZS`000 383,789
457,073 128,500 1,278,500 2,537,166
171,325 15,518 50,000 620,632
The Statutory Minimum Reserve (SMR) deposit is not available to finance the Bank’s day-to-day operations and is hence excluded from cash and cash equivalents for the purpose of the cash flow statement (See Note 31). The cash on hand and balances with Bank of Tanzania are noninterest bearing. Minimum reserve requirement was 8% of the average deposits.
6.
7.
PLACEMENTS AND BALANCES WITH OTHER BANKS Placements with local banks Balances with local banks Cheques and items for clearance with other banks
Current . LOANS AND ADVANCES TO CUSTOMERS Commercial loans Staff loans and advances Gross loans and advances Less: Provisions for impairment Net loans and advances Expected to be received Within one year After one year Net loans and advances
8.
9.
INVENTORIES ATM cards OTHER ASSETS Prepayments Staff salary advances Withholding tax receivable Other assets
2014 TZS`000 7,805,556 525,065 127,757 8,458,378
2013 TZS`000 3,841,476 300,322 443 4,142,241
8,458,378
4,142,241
7,284,611 461,054 7,745,665 (94,778) 7,650,887
1,130,180 209,657 1,339,838 1,339,8382,6 79,675
978,376 6,672,511 7,650,887
361,481 978,357 1,339,838
15,236
18,989
120,766 5,934 51,976 60,109 238,785
63,492 3,116 38,772 1,048 106,428
Annual Report 2014 Taarifa ya Mwaka
87
88
Annual Report 2014 Taarifa ya Mwaka 7,910 234,467 242,377
86,285
At 31 December
Net book value
118,662 118,662
ATM and generator TZS`000
At 1 January Charge for the period
Accumulated depreciation
At 1 January Additions At 31 December
Cost
31 December 2014
PROPERTY AND EQUIPMENT
44,687
28,970
6,834 22,136
61,571 12,085 73,656
Computers TZS`000
No item of property and equipment has been pledged as security for liabilities.
10.
114,251
54,171
12,066, 42,105
144,794 23,627 168,421
Office machines & equipment TZS`000
NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2014 (CONTINUED)
MAENDELEO BANK PLC FINANCIAL STATEMENTS
61,720
21,048
4,878 16,170
73,180 9,588 82,768
Furniture & fittings TZS`000
37,648
3,445 11,253 14,698
41,347 11,000 52,347
Motor vehicles TZS`000
344,593
35,136 116,133 151,269
439,561 56,301 495,862
Total TZS`000
Maendeleo Bank
118,663
At 31 December
54,738
6,834
6,834
61,572
61,572
Computers TZS`000
No item of property and equipment has been pledged as security for liabilities.
110,753
7,910
At 31 December
Net book value
7,910
Charge for the period
Accumulated depreciation
118,663
Additions
Cost
31 December 2013
ATM and generator TZS`000
PROPERTY AND EQUIPMENT (CONTINUED)
132,729
12,066
12,066
144,795
144,795
Office machines & equipment TZS`000
68,303
4,878
4,878
73,181
73,181
Furniture & fittings TZS`000
NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2014 (CONTINUED)
MAENDELEO BANK PLC FINANCIAL STATEMENTS
37,902
3,445
3,445
41,347
41,347
Motor vehicles TZS`000
404,425
35,136
35,136
439,561
439,561
Total TZS`000
Maendeleo Bank
Annual Report 2014 Taarifa ya Mwaka
89
Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2014 (CONTINUED) 11. INTANGIBLE ASSETS At 31 December 2014
TZS`000
Cost 1 January 2014 Additions 31 December 2014
167,013 77,834 244,847
Amortisation 1 January 2014 Charge for the year 31 December 2014
18,396 58,910 77,306
Net Book Value
167,541
At 31 December 2013 Cost Additions
167,013
31 December 2013
167,013
Amortization Charge for the year
18,396
31 December 2013
18,396
Net book value
148,617
No intangible assets have been pledged as security for liabilities. The intangible assets represent the computer software acquired by the Bank. 12. LEASEHOLD IMPROVEMENTS At 31 December 2014
90
TZS`000
Cost 1 January 2014 Additions 31 December 2014
325,018 27,951 352,969
Amortization 1 January 2014 Charge for the year 31 December 2014
36,113 31,622 67,735
Annual Report 2014 Taarifa ya Mwaka
Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2014 (CONTINUED) Net book value
285,234
At 31 December 2013 Cost Additions At 31 December 2013
TZS`000 325,018 325,018
Amortization Charge for the year At 31 December 2013
36,113 36,113
Net book value
13. DEPOSITS FROM CUSTOMERS Current accounts Savings accounts Time deposits accounts
14. OTHER LIABILITIES Accrued expenses Insurance payables Others
Current Non-current
288,905
2014 TZS`000
2013 TZS`000
5,279,135 2,927,455 7,617,731 15,824,321
1,773,129 685,915 560,173 3,019,217
39,323 82,749 49,930 172,002
15,374 12,296 916 28,587
172,002 -
28,587 -
15. DEFERRED INCOME TAX
2014 TZS`000
2013 TZS`000
Deferred income tax
(13,570)
25,970
Deferred income tax is calculated on all temporary differences under the liability method using a principal tax rate of 30%. The movement on the deferred income tax account is as follows:
At start of the year Credit to statement of profit or loss and other comprehensive income At end of year
2014 TZS`000 25,970
2013 TZS`000 -
(39,540) (13,570)
25,970 25,970
Annual Report 2014 Taarifa ya Mwaka
91
Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2014 (CONTINUED) Deferred income tax liability and deferred income tax credit to the statement of profit or loss and other comprehensive income are attributed to the following items: 2014 TZS`000 18,737 (28,432) (3,875) (13,570)
2013 TZS`000 25,417 553 25,970
CAPITAL AND RESERVES Share capital Authorized 60,000,000 shares of TZS 500 each
30,000,000
30,000,000
Called up and fully paid up 9,029,056 shares of TZS 500 each
4,514,528
4,514,528
Deferred income tax Property and equipment Provisions Unrealised exchange gains
16.
17.
REGULATORY RESERVE Regulatory reserves represent an amount set aside to cover additional provision for losses required in order to comply with the requirements of the Bank of Tanzania. This reserve is not available for distribution. Provision for non-performing assets is computed using both IAS 39 approach and BOT regulatory approach. IAS 39 provision is charged to the statement of profit or loss and other comprehensive income. Where the IAS 39 provision is less than BOT provision, then the excess over IAS 39 provision is taken to a non-distributable reserve known as Regulatory Risk Reserve. During the year under review the provisions using both approaches were as follows:
Provision per BOT Approach Provision per IAS 39 Excess over IAS provision taken to Regulatory Risk Reserve
TZS 2014 TZS`000 110,216 (94,778) 15,348
TZS 2013 TZS`000 1,843 1,843
The Regulatory Reserve is not part of the bank`s core capital.
18.
INTEREST INCOME Loans and advances to customers Placements and balances with other banks
92
Annual Report 2014 Taarifa ya Mwaka
2014 12 months TZS`000
2013 4 months TZS`000
1,027,252
17,538
481,133
502,326
1,508,385
519,864
Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2014 (CONTINUED) 19.
INTEREST EXPENSE Deposits from customers: 232,907
3,078
24,305
1,417
257,212
4,495
301,328
49,914
89,386
5,902
390,714
55,816
(12,209) 378,505
(1,823) 53,993
12,918
812
662,019
180,762
Pension costs- defined contribution plan
66,025
18,076
Skills and Development Levy
33,100
9,038
761,144
207,87620 7,876
-Time deposits -Deposits due to other banks
20.
NET FEES, COMMISSION AND OTHER INCOME Fees and commission and other income Fees Commission received Fees and commission expense Financial charges
21.
FOREIGN EXCHANGE INCOME Foreign exchange income
22.
STAFF COSTS Salaries and allowances
Annual Report 2014 Taarifa ya Mwaka
93
Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2014 (CONTINUED)
23.
2014 12 months
2013 4 months
GENERAL AND ADMINISTRATION COSTS
TZS`000
TZS`000
Office expenses
654,012
222,623
Board expenses Board members remuneration Audit remuneration Accounting fees Rent expense Property and equipment maintenance cost Fuel cost Depreciation Preoperating expenses Amortisation Staff welfare Other expenses
3,161
-
29,590
4,769
18,000
10,080
240
-
76,853
33,239
31,339
12,996
16,641
3,900
116,133
35,136
-
465,053
95,527 53,993
54,509 10,693
11,959
1,558
1,107,448
854,556
(39,540)
25,970
(39,540)
25,970
24. INCOME TAX EXPENSE Deferred income tax (Note 15)
The tax on the Bank’s profit differs from the theoretical amount that would arise using the statutory income tax rate as follows:
Loss for the year before tax Tax calculated at the statutory income rate of 30% (2013: 30%)
2014
2013
12 months
4 months
TZS`000
TZS`000
(320,774)
(492,258)
-
-
(39,540)
25,970
(39,540)
25,970
Tax effect of: Temporary differences
94
Annual Report 2014 Taarifa ya Mwaka
Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2014 (CONTINUED) 25.
BASIC AND DILUTED EARNINGS PER SHARE The calculation of the basic earnings per share was based on the net profit attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding during the year, calculated as follows:
Net loss attributable to shareholders Weighted average number of share in issue (Note 16) Basic and diluted earnings per share
2014
2013
12 months
4 months
TZS`000
TZS`000
(281,234)
(518,227)
9,029
9,029
(31.16)
(57.4)
There being no dilutive or dilutive potential share options, the basic and diluted earnings per share are the same. 26.
DIVIDEND PER SHARE Dividends are not recognised as a liability until they have been ratified at the Annual General Meeting. The bank made a loss of TZS 281,234,000 (2013: TZS 518,228,000) during the period ended 31 December 2014 and the Board of Directors, therefore does not recommend any payment of dividends to shareholders.
27.
FINANCIAL INSTRUMENTS BY CATEGORY Loans and receivables TZS`000
Held to maturity TZS`000
Total TZS`000
2,537,166
-
2,537,166
652,822
-
652,822
7,650,887
7,805,556 -
7,805,556 7,650,887
238,785
-
238,785
7,889,672
7,805,556
18,885,216
31 December 2014 Financial assets Cash and balances with Bank of Tanzania Balances with other banks 窶田urrent and call accounts Placements with other banks Loans and advances Other assets
Annual Report 2014 Taarifa ya Mwaka
95
Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2014 (CONTINUED)
Financial liabilities at amortized costs TZS`000 Financial liabilities Deposits from customers
15,824,322
Other liabilities
172,002 15,996,324
31 December 2013 Loans and receivables TZS`000
Held to maturity TZS`000
Total TZS`000
620,632
-
620,632,
300,764
-
300,764
1,339,838
3,841,476 -
3,841,476 1,339,838
106,428
-
106,428
2,367,663
3,841,476
6,209,138
31 December 2013 Financial assets Cash and balances with Bank of Tanzania Balances with other banks –current and call accounts Balances with other banks – Time deposits Loans and advances Other assets
Financial liabilities at amortized costs TZS`000 Financial liabilities Deposits from customers Other liabilities
3,019,216 28,587 3,047,803
96
Annual Report 2014 Taarifa ya Mwaka
Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2014 (CONTINUED) 28.
FAIR VALUE HIERACHY AND MEASUREMENT 31 December 2014 Level 1
Level 2
Level 3
Total
TZS`000
TZS`000
TZS`000
TZS`000
-
2,537,166
-
2,537,166
-
8,458,378
-
8,458,378
-
7,650,887
-
Deposits
-
Other liabilities
-
172,002
-
15,996,324
Financial assets Cash and balance with Bank of Tanzania Balances with other banks Loans and advances Other assets
-
7,650,887
238,785 18,885,216
-
238,785 18,885,216
15,824,322
-
15,824,322
Financial liabilities -
172,002
-
15,996,324
31 December 2013 Level 1
Level 2
Level 3
Total
TZS`000
TZS`000
TZS`000
TZS`000
-
620,632
-
620,632
-
4,142,241
-
4,142,241
-
1,339,838
-
106,428 6,209,139
-
Deposits
-
3,019,216
Other liabilities
-
28,587
-
-
3,047,803
Financial assets Cash and balance with Bank of Tanzania Balances with other banks Loans and advances Other assets
-
1,339,838 106,428 6,209,139
Financial liabilities 3,019,216
-
28,587
-
3,047,803
At fair value through profit or loss financial assets or liabilities- these instruments are at quoted list prices, they are classified as level 1. Cash and bank balances, loans and advances, prepayments, deposits and payables and accruals are at amortised cost and their carrying amounts approximate their fair values as they have variable interest rate and the rates are market related. As the fair values are not based on quoted list prices, they are classified as level 2 as it is based on similar market transactions. At fair value through profit or loss financial assets or liabilities – these instruments that use inputs that have significant effect on the recorded fair values that are not based on observed market data, they are classified as level 3.
Annual Report 2014 Taarifa ya Mwaka
97
Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2014 (CONTINUED) All assets and liabilities are classified as level two with carrying value equaling fair value, therefore there are no fair value adjustments
29.
EFFECTIVE INTEREST RATES OF FINANCIAL ASSETS AND LIABILITIES The effective interest rates for the principal financial assets and liabilities at 31 December 2014 and 2013 were as follows: 책 2014 2013
30.
%
%
Placements with other banks
6.08
7
Loans and advances to customers
13.5
25.6
Customer deposits
1.61
1.68
RELATED PARTY TRANSACTIONS Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial or operational decisions. The volume of related party transactions for the year and the outstanding amounts at the yearend were as follows:2014
2013
TZS`000
TZS`000
42,034
12,394
Key management personnel
242,319
109,657
Loans to shareholders
509,417
-
793,770
122,051
Loans, advances and overdrafts to related parties Loans and advances to customers at 31 December 2014 include loans to key personnel as follows: Directors
Loans to related party were in respect of Directors and Senior Management. Directors were issued loans at a rate of 22% per annum and loans to Management were issued at 7% per annum. Loans to Directors were issued on commercial terms and conditions at market rate while those to management were issued at a preferential interest rate as per the approved Credit Policy. All loans in this category were on current status as at the reporting date.
98
Annual Report 2014 Taarifa ya Mwaka
Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2014 (CONTINUED)
Deposits from shareholders, directors and key management Beginning of the year Received during the year Repaid during the year Deposits as at end of the year
2014
2013
TZS`000
TZS`000
528,519
-
6,382,743
1,335,449
(6,307,641)
(806,930)
603,621
528,519
The deposits in current accounts do not earn interest whist those in savings account earn interest at the rate of 2% per annum. These transactions are carried out at arm’s length. As at 31 December 2014 there were no loans issued to companies controlled by Directors or their family.
Directors compensation Allowances
2014
2013
12 months
4 months
TZS`000
TZS`000
29,590
2,442
312,000
101,200
90,000
25,300
402,000
126,500
No fees were paid to Directors (2013: Nil) Key management personnel compensation Salaries and allowances (Short term employee benefits) Other long benefits ( Post-employment benefits)
Key management personnel are described as those persons having authority and responsibility for planning, directing and controlling the activities of the Bank, directly or indirectly. The bank`s key management is the Managing Director and all heads of departments. Compensations of the Bank`s key management personnel include basic salaries, transport allowances, housing allowance, telephone allowance and post-employment benefits.
Annual Report 2014 Taarifa ya Mwaka
99
Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2014 (CONTINUED) 31.
CASH AND CASH EQUIVALENTS For the purposes of the cash flow statement, cash and cash equivalents comprise the following: 2014
2013
TZS`000
TZS`000
Cash on hand (Note 5)
673,093
383,789
Balances with Bank of Tanzania (Note 5)
585,573
186,843
1,843,284
3,842,240
3,101,950
4,412,872
Placements and balances with other banks
Cash and cash equivalents exclude TZS 1,278,500,000 (2013: TZS 50,000,000) cash reserve requirement held with the Bank of Tanzania. Banks are required to maintain a prescribed minimum cash balance with the Bank of Tanzania that is not available to finance the Bank’s day to day activities. The amount is determined as 8% of the average outstanding deposits. 32. COMMITMENTS AND CONTINGENT LIABLITIES Loan commitments guarantee and other financial facilities The Bank did not have loan commitments guarantee and other financial facilities as at 31 December 2014. Operating lease commitments The Bank has a 3 year operating lease for office space effective from the 1st June 2013 and ending on the 31 May 2016. The lease may be renewed after consent of both parties for a similar or other period. The future minimum lease payments under non-cancellable operating leases are as follows:
Not later than one year Later than one year and not later than five years
2014
2013
TZS`000
TZS`000
76,853
41,251
230,559
82,502
The Directors are of the view that these commitments will be sufficiently covered by future net revenues and funding. Legal claims There are no pending legal claims against the bank. Neither is Board of Directors aware of any potential legal claims against the bank as well.
100
Annual Report 2014 Taarifa ya Mwaka
Maendeleo Bank
MAENDELEO BANK PLC FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2014 (CONTINUED) Capital commitments The Management certifies that there was no capital commitment as at 31 December 2014. 33.
EVENTS AFTER REPORTING DATE Management is not aware of any significant events after reporting date which had material impact on the financial statements.
34.
COMPARATIVE FIGURES Previous year's figures have been regrouped wherever considered necessary in order to make them comparable with the current year's figures.
Annual Report 2014 Taarifa ya Mwaka
101
Maendeleo Bank
NOTES:
102
Annual Report 2014 Taarifa ya Mwaka
Maendeleo Bank
Maendeleo Bank PLC, Head Office P. O. Box 216 Dar es Salaam - Tanzania Telephone: +255 22 2110518 Fax: +255 22 211 0595 Email: info@maendeleobank.co.tz www.maendeleobank.co.tz