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ANNUAL
REPORT
A N N U A L G E N E R A L M E E T I N G 2 01 3 I N F O R M A T I O N B O O K L E T
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NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the Annual General Meeting (AGM) of UT Bank Limited will be
held at the National Theatre, Accra, Ghana on Thursday 17th April 2014 at 10:00am to transact
the following business:
DATED at Accra this day 21st Day of March 2014.
BY ORDER OF THE BOARD
Ordinary Business
Ordinary Resolutions
1. TO CONSIDER and adopt the statement of Accounts of the Company for the year ended 31st
December 2013 together with the Reports of the Directors and Auditors thereon.
2. TO RE-ELECT Directors
• To re-elect Mr. Martyn Mensah as a Director under Regulation 59 of the Company’s
Regulation and Section 298(D) of the Companies Code 1963, Act179.
3. TO ELECT Mr. Andreas Voss as a Director of the Bank.
4. TO FIX the remuneration of Directors.
5. TO AUTHORISE the Directors to approve the remuneration of the Auditors for the year ending
31st December 2013.
MARY KESSIE (MRS.)
Company Secretary
NOTE: A member entitled to attend and vote at the Meeting is entitled to appoint a proxy and
vote in his/her/its stead. A proxy need not be a member of the Bank. A proxy form is enclosed and
for it to be valid for the purpose of the meeting it must be completed and deposited at the
Registered Office of the Registrars of the Company, NTHC Limited, Martco House, No. D542/4 Okai
Mensah Link , Adabraka, Accra P.O. Box 9563, Airport- Accra not less than 48 hours before the
meeting.
Special Business
Special Resolutions
6. TO AUTHORISE the Directors of the Company to raise capital of up to GHS100million by way of
rights issue and/or private placements on such terms and conditions as they may consider
beneficial to the Bank and its shareholders, including providing specific rights (such as Board
representation) to certain categories of investors as they may consider appropriate and in the
best interest of the Bank and its shareholders
7. TO AUTHORISE the Company in accordance with its Regulations and subject to Section 61 of
the Companies Act, 1963(ACT 179), to make market purchases of the Company’s ordinary
shares up to a maximum of 5 percent of its issued share capital and to operate a share deals
account for that purpose.
8. TO APPROVE the circulation of the Notice of General Meetings, Profit & Loss Accounts,
Balance Sheet, Reports and any other relevant information by print or electronic means.
1
Gye Nyame: Omnipotence and immortality of God
UT BANK ANNUAL REPORT
CONTENTS
Notice of Annual General Meeting
Chairman’s Statement
CEO’s Statement
Directors’ Report
Independent Auditors Report
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flow
Notes to the Financial Statement
Branch Locations
2
1
3
5
8
9
10
11
12
13
14
15
Directors, Officers and Registered Office
Resolutions
Proxy Form
The Adinkra symbols express various themes that
relate to the history, beliefs and philosophy of the
Asante. They mostly have rich proverbial meaning
since proverbs play an important role in the Asante
culture.
The use of Proverbs is considered as a mark of wisdom.
UT BANK ANNUAL REPORT
16
17
18
CHAIRMAN’s STATEMENT
Introduction
Fellow Shareholders, Ladies and Gentlemen, I welcome you to the 6th
Annual General Meeting of UT Bank
Operating Environment Review
The global economy began a recovery in the second half of 2013. This
was due to increased demand in advanced economies which fueled a
rebound in exports in the emerging markets.
On the local front, the cost of doing business increased significantly,
against the backdrop of increases in petroleum and utility prices as
well as the energy crisis during the first half of the year. Furthermore,
in an effort to plug the hole in the expanding budget deficit, the
Government of Ghana increased its tax rates.
Inflation stood at a year high of 13.5% at the end of 2013, clearly
missing the targeted 7% to 11% range. This was driven by rising prices
in housing, utilities and energy which increased by 35% year on year,
while prices in the transport sector shot up by 26% within the period
under review.
The depreciation of the cedi, which seemed to have abated in 2013,
picked up with renewed strength in the final quarter. This was on the
back of a variety of factors including lower volumes on individual
remittances and foreign direct investment as well as a decline in
receipts from the sale of gold and cocoa. By the end of the year, the
local currency had depreciated by 15% against the US Dollar.
Economic growth was slow for most part of the year partly due to the
political gridlock, however it picked up subsequently in the final
quarter. Real GDP growth at the end of the year was therefore strong,
albeit down from 7.9% in 2012 to 7.4% in 2013. The main contributor
to this growth was the oil sector, without which GDP growth would
have declined to 5.8%.
Rates on government securities also trended downward during the
year. The 91-day and 182-day bill rates dropped from 23.1% and 23%
UT BANK ANNUAL REPORT
respectively in 2012 to 19.2% and 18.7% respectively in 2013. The
average rate on government securities were however comparatively
higher than in the previous year. The 91-day and 182-day bill rates
averaged 21.9% in 2013 compared to 18.8% and 18.9% respectively.
Financial Review
The Bank’s revenue lines remained strong in 2013. Interest income
was GH¢188million, representing a 40% increase from the previous
year, while non-funded income increased from GH¢43million to
GH¢53million. However, the 60% growth in interest expense,
attributable to the higher average rate on government securities,
negatively affected our financial performance. Total income increased
by 19% to GH¢125million, a comparatively slower growth.
Given the negative impact of the tough economic conditions on our
customers’ businesses, the Bank took a more prudent stance with
regard to our provisioning. We consequently increased the charge for
doubtful debt to GH¢24million, an increase of 83%.
The aforementioned resulted in a profit before tax of GH¢13.4million
in 2013, representing a 48% drop compared to the previous year.
Dividend
Given our financial performance, the Board of Directors took a tough
decision not to pay out dividend in respect of the financial year
ending 31st December 2013.
Supporting our Capital Adequacy is essential for our operation as a
lending Bank, and a dividend payout would negatively affect this. Our
financial performance over 2013 is only temporary and I ask that, we
as shareholders will grant the Bank every support during this period.
Capital
In December 2013, we received US$10million from Amethis Finance,
a Paris based private equity firm dedicated to investing in Africa.
The funds supported our capital, enabling us to close the year with a
Capital Adequacy Ratio of 12.2%, marginally above the Bank of
Ghana required minimum. We also received medium term debt
funding from reputable companies such as the African Development
Bank, European Investment Bank and responsAbility Global
Microfinance Funds.
We are happy to build relationships with institutions such as these
who like us, support the growth of the SME sector.
Corporate Governance
We embarked on a number of developments to improve our corporate
governance processes in line with internationally accepted standards.
The International Finance Corporation (IFC), as part of its Technical
Advisory Services, conducted a review of our corporate governance
structure during the year. This led to a number of changes including
the reconstitution of the board, and the subsequent appointment of
Mrs. Linda Osei-Akoto as Lead Independent Director (LID) and Mr. Alex
Bernasko as Corporate Governance Lead Person (CGLP). In this new
capacity, Mrs. Linda Osei-Akoto will coordinate the activities of
Non-Executive Directors, and Mr. Bernasko is to ensure the
implementation of the IFC recommended amendments as well as the
continued development of our corporate governance structure.
One of our principal shareholders DEG, officially nominated Mr.
Andreas Voss, their Regional Director for West Africa, to represent
their interest on the Board. The addition of Mr. Voss to our team will
be very beneficial as he brings along a vast experience in the global
financial industry and a boost to our quest to achieve international
standards of professionalism.
Corporate Social Responsibility (CSR)
Giving back to our society remains one of the key pillars upon which
our business is built. We exist because of our community, and it is
essential that we continually contribute to its development.
The Bank continued its financial literacy workshops and clinics in
collaboration with the Ghana Chamber of Commerce and GIZ to train
our customers to become more efficient and prudent in managing
3
their business. As part of the programme, customers also received
free medical screening on conditions such as blood pressure, blood
sugar, cholesterol, Body Mass Index etc. In all, over 1,500 people
participated in the workshops and clinics.
UT Bank once again championed its crusade of creating awareness
about breast cancer through its Pledge Pink Campaign. As a boost to
the Campaign, the Bank acquired a mobile screening van at a cost of
about US$65,000. close to 8000 people were screened using this van
out of which 106 suspected cases of breast cancer were identified.
The Bank also paid for the treatment of 48 women at various stages
of the disease.
We had another successful edition of the Chairman’s Christmas Day
Outreach, where about 2000 food packs and drinks were distributed
to the needy on some major streets of Accra as well as inmates of the
Senior Correctional Centre in Accra (previously called the Borstal
Institute).
As its contribution to the development of Sports in Ghana, UT Bank
sponsored the Amidaus Professionals Football Club, a budding team
in the Ghana Premier League based in Tema, and two excellent golf
tournaments.
Our CSR activities were recognized by Industry, earning us the First
Runner-up position in Corporate Social Responsibility at the 2013
Ghana Banking Awards.
Conclusion and Outlook
To this end, the Bank has undertaken major structural changes and
product innovations to improve our service delivery.
Our aim is to return to you, our shareholders, at the next AGM with a
story of success; a story of a brand rejuvenated, demonstrating
flexibility in our ability to recover quickly in the face of challenges.
Our next challenge is always our greatest and we are focused on
ensuring that your Bank stands firm in the face of economic
uncertainties. We know that you- our shareholders trust us to deliver,
and we will, Just like the Adinkra symbol Nyinkyim we remain
dynamic, innovative, tough, adaptable and resilient.
Thank you.
Joseph Nsonamoah
Chairman
Nkyinkyim: Playing many roles. (Dynamism)
Initiative, Toughness, Adaptability, Resoluteness
In spite of challenges in the macro-economic environment, which
negatively impacted our financial performance, we remain resolute in
our efforts to achieve our long term vision of redefining banking.
We do not expect 2014 to be any less challenging, considering the
sharp Cedi depreciation and rising inflation. We also recognize that
attracting cheaper deposits and improving the return on our assets
are essential to a stronger financial performance. However, we are
confident that the structures we have put in place will enable us
achieve our set targets.
4
UT BANK ANNUAL REPORT
CEO’s STATEMENT
Introduction
The year 2013 was a challenging one for UT Bank, as the expected rise
in economic activity was not forthcoming until much later in the year.
The country experienced a political deadlock for a greater part of the
year, as a result of the main opposition party contesting the 2012
election results; this slowed government expenditure, causing a
build-up in debt owed to the private sector.
Economic fundamentals remained challenging as witnessed in the
rising inflation, high interest rates on government securities, and the
sharp depreciation of the cedi. All of these had a far reaching impact
on the cost of doing business, particularly in the SME sector. Indeed
when economic conditions are as tough as they were, it is the SME
sector which suffers the most.
Financial Highlights
• Capital Adequacy Ratio of 12.2% (2012: 13.4%)
• Total Assets grew by 35% to GH¢ 1.34billion
• Loans and Advances (net) increased by 35% to GH¢ 917million
• Interest Income was up by 40% to GH¢ 188million
• Interest Expense grew by 60% to GH¢ 116million
• Non Funded Income increased by 23% to GH¢ 53million
• Operating Expenses grew by 34% to GH¢ 87million
• Profit Before Tax was down by 48% to GH¢ 13million
Income Statement Analysis
We made a profit before tax of GH¢13million, representing a 48%
decline year-on-year. The decline in profitability was mainly due to a
sharp growth in interest expenses and higher provisioning made
during the year.
The growth in our net interest income remained strong year-on-year,
rising by 40% to GH¢188million mainly as a result of the growth in
our loan book. Non-funded income growth was equally impressive; it
grew by 23% to GH¢53million in 2013. Growth in this line stemmed
from increased transactional business and trade finance activities. UT
Bank is indeed fast growing in the trade finance space. In 2013 alone
UT BANK ANNUAL REPORT
we participated in transactions worth over US$200million
representing more than 100% growth over the previous year. Our
customers appreciate our speed for doing business and the varied
solutions we offer for their complex needs.
On the other hand we continued to struggle with high interest
expenses; a symptom of our legacy of expensive deposits and high
interest rates on government securities. Although the rates on
government securities declined slightly during the year, the average
rates for 2013 were higher compared to the previous year. The rate on
the 91-day and 182-day bill averaged 21.9% in 2013 compared to
18.8% and 18.9% respectivelyin 2012. Our average cost of funds was
therefore 200bps higher at 12.5% compared to 10.5% in 2012. Our
total income grew by 19% to GH¢125million.
We continued to invest in our e-business platforms and operating
efficiency in order to enrich our customer service offering. We
completed our migration to the VISA platform, and now offer
customers a wide range of products including Debit, Prepaid, Gift and
Youth Cards.Our cards are verified by Visa and chip enabled, meaning
they cannot be cloned. These features make them among the most
secure in the world. Our internet Banking platform is currently
operational and adequately positions us to compete for larger
corporate and individual deposits.
Furthermore, we opened two new branches: Tamale in the Northern
Region and Suame in the Ashanti Region.These, in addition to our
mobile Banking van, are enabling us to reach further into the
Ghanaian terrain. All these improvements came at a cost as our
operating expenses for the year increased by 34% to GH¢87million.We
expect to reap the benefits of these investments in the near future.
Balance Sheet Analysis
Our total assets crossed the one billion mark to GH¢1.34billion, up by
35% compared to 2012. Loans and advances continued to be the
dominant asset line and grew by 35% to GH¢917million. We however
improved the structure of our assets, investing more in liquid interest
earning assets by growing our short term investments by 95% to
GH¢120million. Short term investments therefore accounted for 9% of
total assets compared to 6% in the previous year.
On the liabilities end, our deposits grew by 15% to GH¢920million.
Total current and savings accounts amounted to GH¢289million,
compared to GH¢333million in 2012. Attracting cheap deposits was a
challenge for most Banks during the year, particularly due to the
change in regulation, which allowed non-Bank financial institutions
to hold deposits. We therefore had to rely on growing our expensive
deposits to sustain our business.
We also increasingly relied on external funds from reputable external
financial institutions. These funds were cheaper for us than our term
deposits which we price relative to Government securities.
Shareholders’ funds totaled GH¢129million in 2013.
Change Management
Enhancing our customer service experience is the foundation upon
which we grow our brand. In 2013 we began an organizational
restructuring with the goal of providing our customers a 360 degree
solution to their business needs. We now have three key business
units namely Corporate, Business and Retail Banking. The
departments are further sub-categorized into sectors and niche
markets catering for the specific needs of our customers. Staff were
assessed, realigned and empowered to maximize performance. The
Balance Score Card System has been introduced to continuously
assess and ensure improved staff performance.
With these changes in our business model we are confident that our
customers will experience the full benefits of doing business with UT
Bank.
Employees
Over time there has risen a need for the Bank to develop a way of
matching our needs as a business, the increasingly complex needs of
our customers and the competencies of our employees. This concept
came to full fruition with the establishment of our learning and
development department, the UT Academy.
UT Academy’s mandate ranges from ensuring the right recruitment
and assessment process, developing training programmes,
recommending professional courses for staff and running the Bank’s
Graduate Development Programme, among others. All these fall
within our long term strategy of being employer of choice and
developing top notch employees.
5
Outlook
As aforementioned, we have invested heavily in our e-business
platform and expect that this will translate into faster and simpler
services in 2014. The introduction of the mobile banking platform will
serve as a foundation for implementing other branchless and agency
banking products. The import of these to our business cannot be
overemphasized in the light of the need for growth in cheap deposits.
As part of our expansion drive we have commenced operations on
Tamale, Suame, North Industrial Area, and East Legon. The East Legon
branch is our first virtual branch, providing 24 hour service. The
branch will also house the newly created Private Banking and Wealth
Management Units.
As we strive to improve our structure and operational processes in
line with globally accepted standards, our Risk Management function
is also being strengthened. Additionally, we continue to invest in the
development of our staff to attain the highest standards.
We are optimistic that the measures we have implemented will yield
the desired results in the coming year.
God bless us all
Adinkrahene: Greatness, Royalty
Prince Kofi Amoabeng
CEO
6
UT BANK ANNUAL REPORT
REPORTS AND FINANCIAL
STATEMENTS
2013
UT BANK ANNUAL REPORT
DIRECTORS' REPORT
The Directors have the pleasure in submitting to the members of the Bank, their report together with the financial statement for the year ending 31 December 2013.
Principal activities
The Bank is licensed to carry out universal banking business in Ghana.
There was no change in the nature of the Bank's business during the year under review.
Results for the year
The financial results of the bank are set out below:
The net profit for the year before tax is
From which is deducted taxation of
Dec. 2013
GH¢'000
13,418
(3,661)
-------------------
giving a profit for the year after taxation of
9,757
To which must be added the balance brought forward on
income surplus account of
16,206
------------------25,963
Transfer to statutory and credit risk reserves
(5,085)
-------------------
Leaving a balance on the income surplus account of
20,878
Dividend paid
(9,522)
-------------------
Leaving a balance to be carried forward on the income surplus account of
11,356
==========
Auditors
In accordance with section 134 (5) of the Companies Code, 1963 (Act 179) the Auditors, Messrs
Deloitte and Touche, continue in office as Auditors of the Bank.
On behalf of the board
………………………................................….
Joseph Nsonamoah
8
….............................……………………….
Prince Kofi Amoabeng
UT BANK ANNUAL REPORT
Statement Of Directors' Responsibilities
The Directors are responsible for preparing financial statements for
each financial year which give a true and fair view of the state of
affairs of the bank at the end of the financial year and of the profit or
loss of the bank for that year.
In preparing those financial statements, the directors are required to:
• Select suitable accounting policies and then apply them
consistently
• Make judgments and estimates that are reasonable and prudent
• State whether the applicable accounting standards have
been followed
Prepare the financial statement on the going concern basis unless
it is Inappropriate to presume that the Bank will continue in
business
The Directors are responsible for ensuring that the Bank keeps
accounting records which disclose with reasonable accuracy the
financial position of the Bank and which enables them to ensure
that the financial statement comply with International Financial
Reporting Standards.
They are responsible for taking such steps as are reasonably open to
safeguard the assets of the Bank, and to prevent and detect fraud
and other irregularities.
The Board
UT Bank has a seven (7) member Board. The Chairman is a
Non-Executive Director who is a separate individual from the Chief
Executive Officer. The Board consists of five (5) Non-Executive
Directors two (2) of whom are Independent Directors. The The two
Independent Directors do not have any significant shareholding
interest or any special business relationship with the Bank.
Election of Board Member
Mr. Andreas Voss was nominated by DEG principal Shareholders of the
Bank in accordance with the Bank’s Regulations Section 59(B) as a
UT BANK ANNUAL REPORT
Director for approval by shareholders. His profile appears below:
Andreas Voss
Andreas Voss is the Regional Director
for DEG, West Africa. He joined DEG in
2006 as an Analyst and later became
an Investment Manager. He rose
through the ranks and is now Vice
President. He is a key account for new
business in West Africa and heads the
DEG West Africa regional office based
in Accra. Before joining the Africa
Department he worked in portfolio Management in East Europe. He
has investment experience in various deals and industries. Prior to
joining DEG, Andreas worked in corporate and project finance with
German commercial banks. Andreas has a degree in economics with
focus on international management as well as training in Banking and
Business Administration.
Commitees of The Board
The Board has delegated various aspects of its work to the following
committees:
The Audit, Risk and Compliance Committee
The Audit, Risk and Committee comprises three Non-Executive
members namely Mr. Charles Aidoo (Chairman), Mr. Martyn Mensah
and Mrs. Linda Osei Akoto, an Independent Non-Executive Director.
The Heads of Internal Audit, Risk Management and Compliance are
ordinarily in attendance at the meetings.
The Governance And Strategy Committee
The Governance and Strategy Committee is made up of of two (2)
Non-Executive Directors and one (1) Executive Director namely Mr.
Joseph Nsonamoah, Mr. Martyn Mensah, and Mr. Prince Amoabeng.
The duties of the Committee are to review the composition of the
Board annually and make recommendations were considered
necessary to ensure that the Board comprises a majority of
Non-Executive Directors with an appropriate mix of skills and
experience. It is also responsible for recommending strategies for the
Bank and for ensuring that the Bank upholds good corporate
governance principles in all its operations.
The HR, Performance And Remuneration
Committee
The HR, Performance and Remuneration Committee is made up of
three (3) Non-Executive Directors namely Mr. Joseph Nsonamoah, Mr.
Martyn Mensah, Mrs. Linda Osei- Akoto.
The Committee is responsible for reviewing all HR Policies to ensure
that employees are treated fairly and work in very conducive
environments. High standards of health and safety are upheld and
promoted at the work place. It is also responsible for setting
performance indicators for the Bank and determining the framework
for remuneration of the Bank's Chairman and Executive Directors. The
HR, Performance and Remuneration Committee also reviews and
approves the remuneration packages, incentive plans and staff
bonuses for the Bank.
The Committee is responsible for authorizing, directing and reviewing
the programme of the Internal Audit Unit, reviewing the Bank's
compliance with financial and risk management control systems as
well as reviewing the current statutory and audit reports. It also
reviews significant financial and other risk exposures and the steps
management takes to monitor, control, and report such exposures.
9
INDEPENDENT AUDITORS' REPORT
.
Independent Auditors' Report
To the members of UT Bank Ghana Limited
We have audited the accompanying financial statements of UT Bank
Ghana Limited on pages 9 to 53 which comprise the statement of
financial position as at 31 December 2013, statement of
comprehensive income, statement of changes in equity and
statement of cash flow for the year then ended, together with the
summary of significant accounting policies and other explanatory
notes, and have obtained all information and explanations which, to
the best of our knowledge and belief, were necessary for the purposes
of our audit.
Directors' Responsibility For The Financial
Statement
The Directors are responsible for the preparation and fair
presentation of these financial statements in accordance with the
Companies Code, 1963 (Act 179). These responsibilities include:
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.
Auditors' Responsibilities
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in
accordance with International Standards on Auditing. Those
standards require that we comply with ethical requirements and plan
and perform the audit to obtain reasonable assurance as to whether
the financial statement are free from material misstatement.
An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditor's judgement, including
the assessment of the risks of material misstatement of the financial
statement, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the
entity's preparation and fair presentation of the financial statement
are to design audit procedures that are appropriate in the
10
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 accounting estimates made by management, as well
as evaluating the overall presentation of the financial statement.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
- The Bank has generally complied with the provisions in the
Banking Act 2004(Act 673) and the Banking (Amendment) Act
2007 (Act 738).
Chartered Accountants
Accra, Ghana
Licence No. ICAG/F/026
Opinion
In our opinion, the financial statements give a true and fair view of the
financial position of the Bank as at 31 December 2013, and of its
financial performance and statement of cash flow for the year then
ended and are drawn up in accordance with the International
Financial Reporting Standards (as issued by the IASB and in the
manner required by the Companies Code, 1963 (Act 179), and the
Banking Act, 2004 (Act 673), as amended by the Banking Amendment
Act, 2007 (Act 738).
……………………………………………………… 2014
Andrew Opuni-Ampong
Practising Certificate: Licence No. ICAG/P/1132
Report On Other Legal and Regulatory
Requirements
The Ghana Companies Code, 1963 (Act 179) requires that in carrying
out our audit work we consider and report on the following matters.
We confirm that:
i. i. we have obtained all the information and explanations which to
the best of our knowledge and belief were necessary for the
purposes of our audit;
ii. in our opinion proper books of accounts have been kept by the Bank,
so far as appears from our examination of those books; and
iii. The balance sheet (statement of financial position) and Profit and
loss (statement of comprehensive income) of the Bank are in
agreement with the books of accounts.
The Banking Act 2004 (Act 673) section 78 (2) requires that we state
certain matters in our report. We hereby state that:
- The accounts give a true and fair view of the state of affairs of the
bank and its results for the year under review;
- We were able to obtain all the information and explanation
required for the efficient performance of our duties as auditors;
- The Bank’s transactions were within its powers; and
Dono ntoaso (Nnonnowa): Unity, Concord,
Strength
UT BANK ANNUAL REPORT
STATEMENT OF COMPREHENSIVE INCOME
Statement of Comprehensive Income
For the year ending 31 December 2013
Note
Dec. 2013
Dec. 2012
GH¢'000
GH¢'000
Interest income
4
187,888
134,110
Interest expense
5
(116,231)
(72,621)
-------------------
------------------
71,657
61,489
Net interest income
Net fees and commissions income
6
34,865
29,753
Other operating income
7
18,051
13,421
-------------------
------------------
124,573
104,663
(87,045)
(64,802)
Operating income
Operating expenses
8
Impairment charge
10
Profit before taxation
Taxation
11(i)
National Stabilization Levy
11(ii)
Profit for the year
Other comprehensive income
Total comprehensive income
(24,110)
(13,153)
-------------------
------------------
13,418
26,708
(2,980)
(5,777)
(681)
-
-------------------
------------------
9,757
20,931
-
-
-------------------
------------------
9,757
20,931
==========
===========
Basic earnings per share
0.02
0.04
Diluted earnings per share
0.02
0.04
UT BANK ANNUAL REPORT
11
STATEMENT OF FINANCIAL POSITION
Statement of Financial Position
As at 31 December 2013
Assets
Cash and balances with Bank of Ghana
Due from other Banks and financial institutions
Loans and advances (Net)
Other assets
Income tax assets
Investment securities
Goodwill
Property, plant and equipment
Intangible assets
Dec. 2013
GH¢'000
Dec. 2012
GH¢'000
14
15
16
19
11(iii)
20
25
17
18
103,835
73,639
917,053
56,533
2,061
135,296
10,397
30,426
7,096
------------------1,336,336
==========
92,147
52,579
679,648
54,720
278
68,988
10,397
21,033
7,115
-----------------986,905
===========
22
21
23
24
920,261
11,737
124,703
293
------------------1,056,994
-------------------
797,782
30,776
2,000
2,665
-----------------833,223
------------------
13
26
447
150,225
------------------150,672
------------------1,207,666
------------------85,275
11,356
30,341
1,698
------------------128,670
------------------1,336,336
==========
0.28
607
24,640
-----------------25,247
-----------------858,470
-----------------85,275
16,206
25,462
1,492
-----------------128,435
-----------------986,905
===========
0.17
Note
Total assets
Current Liabilities
Customer deposit and current account
Interest payable and other liabilities
Due to other banks and financial institutions
Deferred income
Total current liabilities
Non current term liabilities
Deferred tax
Term debt
Total liabilities
Shareholders' Funds
Stated capital
Income surplus
Statutory reserve fund
Credit risk reserves
27(iii)
27(iv)
27(v)
Total shareholders' fund
Total liabilities and shareholders' fund
Net assets value per share
These financial statements were approved by the Board of Directors and signed on its behalf by:
…………………………….
Director
12
…………………………….
Director
UT BANK ANNUAL REPORT
STATEMENT OF CHANGES IN EQUITY
Statement of Changes In Equity
For the year ended 31 December 2013
Attributable to equity holders
Stated
Income
Statutory
Credit risk
capital
surplus
reserve
reserves
Total
GH¢'000
GH¢'000
GH¢'000
GH¢'000
GH¢'000
36,000
8,539
14,996
1,694
61,229
-
20,931
-
-
20,931
3,000
(13,264)
10,466
(202)
-
46,275
-
-
-
46,275
--------------
------------------
-------------------
-------------------
------------------
85,275
16,206
25,462
1,492
128,435
=========
===========
===========
============
===========
Stated
Income
Statutory
Credit risk
capital
surplus
reserve
reserves
Total
GH¢'000
GH¢'000
GH¢'000
GH¢'000
GH¢'000
85,275
16,206
25,462
1,492
128,435
Total comprehensive income
-
9,757
-
-
9,757
Transfer (from)/to reserve
-
(5,085)
4,879
206
(0)
Dividend paid
-
(9,522)
-
-
(9,522)
--------------
------------------
-------------------
-------------------
------------------
85,275
11,356
30,341
1,698
128,670
=========
===========
===========
============
===========
Balance at 1 January 2012
Total comprehensive income
Transfer (from)/to reserve
Shares issued
Balance at 31 December 2012
Balance at 1 January 2013
Balance at 31 December 2013
UT BANK ANNUAL REPORT
13
STATEMENT OF CASH FLOW
Statement of Cash Flow
For the year ended 31 December 2013
Dec. 2013
Dec. 2012
GH¢'000
GH¢'000
13,418
26,708
17 & 18
17
7,711
5
------------------21,134
(237,405)
(2,093)
122,479
122,703
(19,039)
(2,372)
------------------5,407
4,525
5
-----------------31,238
(204,416)
22,704
251,974
(42,970)
(17,640)
(289)
2,028
-----------------42,629
11 (iii)
(5,334)
------------------(5,334)
------------------73
-------------------
(4,686)
-----------------(4,686)
-----------------37,943
------------------
(17,281)
201
(66,308)
------------------(83,388)
==========
(11,010)
2,060
194
(37,508)
46,275
-----------------11
==========
(9,522)
125,585
------------------116,063
-------------------
13,301
-----------------13,301
------------------
Increase in cash and cash equivalents
32,748
51,255
Cash and cash equivalents at 1 January
Increase in cash and cash equivalents
144,726
32,748
------------------177,474
==========
93,471
51,255
-----------------144,726
===========
103,835
73,639
------------------177,474
==========
92,147
52,579
-----------------144,726
===========
Note
Profit before tax
Adjustments for:
Depreciation and amortisation
Loss on disposal
Increase in loans and advances
Increase in other assets
Increase in customer deposit and current account
Due to other banks and financial institutions
Decrease in interest payable & other payables
Increase in defined benefit obligation
(Decrease)/increase in deferred income
Tax paid
Net cash (used in)/generated from operating activities
Investing activities
Purchase of property, plant and equipment and software
Changes in lease property and equipment
Proceeds from sales of property, plant & equipment
Purchase of Investment securities
Additional Shares
Net cash used in investing activities
Financing activities
Dividend paid
Increase in term debt
Net cash generated from financing activities
Cash and cash equivalents at 31 December
Analysis of cash and cash equivalents during the year
Cash
Cash with other banks and financial institutions
14
-
UT BANK ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
Notes To The Financial Statements
liquidity at all times, and for all currencies. Hence the Bank aims to
be in a position to meet all obligations, to repay investors on demand,
to fulfil commitments to lend and to meet any other commitments.
For the year ending 31 December 2013
Reporting Entity
UT Bank Ghana Limited is a listed company which operates the
services of banking under the supervision of the Bank of Ghana. The
address and registered office of the Bank is 25B Manet Towers, P.O.
Box 14776, Accra, Ghana.
Significant Accounting Estimates And Assumptions
The detail accounting estimates and assumptions which form part of
the annual report and have been consistently applied can be found in
the annual financial statement which are available for inspection at
the Bank's Head Office at 25B Manet Towers, Airport City, Accra and
on our website: www.utbankghana.com
Quantitative Disclosures
Dec. 2013
Dec. 2012
Capital Adequacy Ratio
12.16%
13.42%
Non Performing Loans
10.92%
11.86%
Qualitative Disclosures
The Bank has exposure to the following risks from its use of financial
instruments:
Credit Risk
Credit risk is the risk of financial loss to the Bank if a customer or
counterparty to a financial instrument fails to meet its contractual
obligations, and arises principally from the Bank's loans and advances
to customers.
Liquidity Risk
The Bank defines liquidity risk as the risk that the Bank either does not
have sufficient financial resources available to meet all its obligations
and commitments as they fall due, or can access them only at
excessive cost. It is the policy of the Bank to maintain adequate
UT BANK ANNUAL REPORT
Market Risk
The Bank recognises market risk as the exposure created by potential
changes in market prices and rates, such as interest rates, equity
prices and foreign exchange rates. The Bank is exposed to market risk
arising principally from customer driven transactions. Market risk is
governed by the General Manager Risk Management who is assisted
by the market risk manager. The Bank has policies on market risk and
limits are proposed within the terms of agreed policy.
Operational Risk
Operational risk is the risk of direct or indirect loss due to an event or
action resulting from the failure of internal processes, people and
systems, or from external events. The Bank seeks to ensure that key
operational risks are managed in a timely and effective manner
through a framework of policies, procedures and tools to identify
assess, monitor, control and report such risks
Compliance and Regulatory Risk
Compliance and Regulatory risk includes the risk of non-compliance
with regulatory requirements. The Bank's Compliance and Internal
Audit function is responsible for establishing and maintaining an
appropriate framework of the Bank's compliance policies and
procedures. Compliance with such policies and procedures is the
responsibility of all managers.
The board of directors has overall responsibility for the establishment
and oversight of the bank's risk management framework.
Breach of statutory limits
Minimum Liquidity Reserve
Penalty For Breach Limits
Dec. 2013
Dec. 2012
Nil
Nil
Nil
Nil
Regulatory Breaches
The Bank did not breach any regulatory requirement during the year.
Contingent Liabilities and Commitments
(i)
Contingent liabilities
Pending legal suits:
(ii)
There are currently no pending suits
against the bank (December 2012: Nil)
Commitments for capital expenditure
Under contract:
There were no outstanding commitments
for capital expenditure not provided for
in the financial statement at 31
December 2013
Dec. 2013
GH¢'000
Dec. 2012
GH¢'000
(iii) Contingent liabilities and commitments
Unsecured Contingent liabilities
and commitments
117,427
152,380
====================
Social Responsibility Cost
An amount of GH¢161,000 (2012: GH¢181,284) was spent as part of
corporate social responsibility of the Bank on institutions such as The
Ghana Heart Foundation, Family Outreach International, Hope for
Kids, Ghana National Trust Fund, Enablis business launchpad, and the
37 Military Hospital just to mention a few.
Capital Commitments
The Bank had no commitment for capital expenditure as at 31
December 2013 (2012: Nil).
15
BRANCH LOCATION
ABOSSEY OKAI
Opposite the Abossey Okai
Central Mosque, Accra
Tel: +233 302 676612/3, 676615
Fax: +233 302 676614
ACCRA
Knutsford Avenue
Near the former UTC Building
Central Accra
Tel: +233 302 665222/672718
Fax: +233 302 665626
ADABRAKA
48 Kwame Nkrumah Avenue
Adabraka, Accra
Tel: +233 302 610300
Fax: +233 302 662640
AIRPORT - MANET
25B Manet Towers, Airport City
P.O. Box CT 1778, Cantonments, Accra
Tel: +233 302 740740
Fax: +233 302 783253
Email: enquiries@utbankghana.com
Website: www.utbankghana.com
ASHAIMAN
Adjacent Ghana Commercial Bank
Ashaiman High Street
Tel: +233 303 310304/310316
CAPE COAST
Tantri Road, Near Expresso Office
Tel: +233 3321 31716/31724
Fax: +233 3321 31994
EAST LEGON
24 Lagos Avenue
East Legon
Tel: +233 302 501043
16
HAATSO
Haatso Market Complex, Accra
Tel: +233 302 520688/501751/501743
Fax: +233 302 520689
KUMASI (SUAME)
Pit 13, Block Y, Tarkwaa Maakro
Suame
Tel: +233 3220 36705
HO
Civic Center, Opposite STC
Tel: +233 3620 27733/27749
Fax: +233 3620 27565
MADINA
2nd Floor, Hollywood Building
Madina Zongo Junction, Accra
Tel: +233 302 521333/6
Fax: +233 302 521324
INDUSTRIAL AREA
16/17 Dadeban Road, Block 5
Industrial Area, North Kaneshie, Accra
KANESHIE
Ground Floor
Kaneshie Market Complex Building
Accra
Tel: +233 302 242957
Fax: +233 302 242952
KOFORIDUA
Linda Door Plaza
Opposite Barclays Bank
Tel: +233 3420 24251/24432/24249
Fax: +233 3420 24250
KUMASI (ADUM)
Addo Kuffour Clinic Building
Opposite A-Life supermarket
Adum
Tel: +233 3220 33065/44238/
44275
Fax: +233 3220 33030
KUMASI (STC)
Prempeh, 1st Street, Adum
Opposite STC, Adjacent Japan
Motors from KMA
P.O. Box KS 9347, Kumasi
Tel: +233 3220 40067/32956/39254
Fax: +233 3220 41317
MAKOLA
Makola Market, Kimberley Avenue Okaishie
Tel: +233 302 664866/7, 669104
Fax: +233 302 664894
NIMA
Opposite the Grand Mosque, Accra
Tel: +233 302 254448/9, 220486
Fax: +233 302 233302
OBUASI
Near Shell Filling Station,
Mangoase
Tel: +233 3225 43182/3
Fax: +233 3225 43180
OSU
Behind the Trust Hospital
Osu R.E. Accra
Tel: +233 302 774955/780046
Fax: +233 302 769375
SPINTEX ROAD - PALACE
Ground Floor
Palace Hypermarket Complex
77 Spintex, Accra
Tel: +233 302 816785-7
SPINTEX ROAD - BAATSONA
White House, Spintex Road
Batsonaa, Accra
Tel: +233 302 816011
Fax: +233 302 816765
SUNYANI
New Melcom Building
Opposite the stadium
Tel: +233 3520 24352/9
Fax: +233 3520 27463
TAKORADI (LIBERATION ROAD)
Liberation Road
Former Farrouk Building
Tel: +233 3120 28228/28558
Fax: +233 3120 30744
TAMALE
House No. 1 Ext. 4, Aboabo, Tamale
Tel: +233 3730 28028/9
TARKWA
Ground Floor
Former UAC Building
SAG Street
Tel: +233 3123 22598/22600
Fax: +233 3123 22599
TEMA
Dennis House
Harbour Road, Community 1
Tel: +233 303 210785/8
Fax: +233 303 210786
TEMA COMMUNITY 2
Former PEP Stores
Opposite Comm. 2 Police Station
Tel: +233 303 214050/210154
Fax: +233 303 214069
UT BANK ANNUAL REPORT
DIRECTORS, OFFICERS AND REGISTERED OFFICE
Directors:
Joseph Nsonamoah
Prince Kofi Amoabeng
Pearl Esua-Mensah
Linda Osei Akoto
Martyn Mensah
Charles Sydney Aidoo
Alex Bernasko
Andreas Voss
Company Secretary:
Mary Kessie
Registered office:
25B Manet Towers, Airport City, Accra
P. O. Box CT 1778
Cantonmenst, Accra
Tel: 0302 740 740
Solicitor:
Gwendy Bannerman
Auditors:
Deloitte & Touche
Chartered Accountants
4 Liberation Road
P.O. Box GP 453
Accra
Tax Consultants:
BakerTilly Andah & Andah
C 645/3 4 Crescent
Asylum Down
P. O Box AN 5845
Accra, Ghana
Bankers:
Bank of Ghana
Ghana International Bank PLC
BHF-Bank Aktiengesellschaft
Standard Chartered Bank
UT BANK ANNUAL REPORT
- Chairman
- Chief Executive Officer
- Executive Director
- Non Executive Director
- Non Executive Director
- Non Executive Director
- Non Executive Director
- Proposed New Director
Mmomudwan: Unity
17
RESOLUTIONS
Board Resolutions
The Board of Directors will be proposing the following resolutions,
which will be put to the Annual General Meeting 2014:
4. To Approve the remuneration of Directors
In accordance with Section 194 of the Companies Act, 1963 (Act
179), the Board will request that shareholders approve the
remuneration of Directors
8. To Approve the circulation of the Notice of General Meetings,
Profit & Loss Accounts, Balance Sheets, Reports and any other
relevant information by print or electronic means
Ordinary Resolutions
1. To Consider and Adopt the Statement of Accounts
The Board will propose for consideration of the 2013 Accounts, and
reports of the Directors and Auditors thereon, as a true and fair view
of the state of affairs of the Company for the year ended the 31st day
of December 2013.
2. To Re-Elect Directors
The following Directors, Mr. Martyn Mensah and Mr. Charles Sydney
Aidoo will retire in accordance with Section 298(D) of the Companies
Code 1963, Act 179 and Regulation 59 of the Company’s Regulation.
Mr. Martyn Mensah who is eligible for re-election, has offered himself
to be re-elected as a Director of the Bank.
Mr. Charles Sydney Aidoo who is eligible for re-election has expressed
his desire to resign as a Director of the Bank.
3. To Elect a Director
Mr. Andreas Voss was nominated by DEG principal Shareholders of the
Bank in accordance with the Bank’s Regulations Section 59(B) that
“at any time when the shares in the Company and the Share
Equivalents held by DEG represent, at least five per cent (5%) of the
issued ordinary shares of the Company, DEG shall have the right to
nominate one (1) Director.” The Board will recommend to members to
approve the election of Mr. Andreas Voss.
18
5. To Authorise the Directors to fix the Remuneration of the
Auditors
In accordance with Section 134(5) of the Companies Code, 1963
(Acts 179) Deloite & Touche will continue in office as auditors of the
Company. The Board would request that they are authorized to fix the
fees of the auditors.
Special Resolutions
6. To Authorise the Directors of the Company to raise capital
In view of the changing nature of the Ghanaian economy, it is
imperative that the Bank has adequate financial muscle in order to
compete effectively and to realize further value for its shareholders.
The Board will propose that, Directors be authorized to raise capital
of up to GHS100million by way of rights issue and/or private
placements on such terms and conditions as they may consider
beneficial to the Bank and its shareholders, including providing
specific rights (such as Board representation) to certain categories of
investors as they may consider appropriate and in the best interest of
the Bank and its shareholders.
7. To Authorise the Company to Purchase its Own Shares
In accordance with Section 61 of the Companies Act, 1963(ACT 179)
and the Bank’s Regulations 12(A) to make market purchases of the
Company’s ordinary shares up to a maximum of 5 percent of its issued
share capital and to operate a share deals account for that purpose.
UT BANK ANNUAL REPORT
PROXY FORM
PROXY FORM
I/WE ……………………………………………………………………………… being a Member of the above-named
Company hereby appoint........................................................................... or failing him the Chairman of the
Meeting as my/our Proxy to vote on my/our behalf at the Annual General Meeting (AGM) of the Company
to be held on Thursday 17th April 2014 at 10.00 a.m. in the forenoon at the National Theatre, Accra.
DATED THE ........................................... DAY OF …………………, 2014
……………………………………………
MEMBER
THIS PROXY FORM SHOULD NOT BE COMPLETED AND SENT TO THE REGSITRARS IF THE MEMBER
WILL BE ATTENDING THE MEETING.
In case of a Body Corporate, this Proxy Form should be completed by the signature of a duly authorised
officer and should be accompanied by a Resolution in accordance with Section 165 of the Companies
Code , 1963 (Act 179).
To be valid, this Proxy Form must be filled up, signed and lodged (together with any authority under
which it is signed) at the Registered Office of the Registrars of the Company , NTHC Limited , Martco
House, No.D 542/4 Okai Mensah Link , Adabraka, Accra, P.O.Box 9563, Airport-Accra not less than 48
hours before the meeting.
NOTE:
This Form is to be used in favour of/against the Resolutions set out in the Agenda.
Please indicate with an “X” in the spaces above how you wish your vote to be cast. Unless otherwise
instructed, the Proxy will vote as he/she thinks fit.
1. TO CONSIDER and Adopt the Statement of Accounts of the
Company for the year ended the 31st day of December 2013
together with the Reports of the Directors and Auditors thereon
AGAINST
FOR
2. TO RE - ELECT Mr. Martyn Mensah as Director of the Bank.
3. TO ELECT Mr. Andreas Voss as a Director of the Bank.
4. TO FIX the remuneration of Directors.
5. TO AUTHORISE the Directors to fix the fees of the Auditors
For the year ending 31st December 2014.
6. TO AUTHORISE the Directors of the Company to raise
capital of up to GHS100million by way of rights issue and/or
private placements on such terms and conditions as they may
consider beneficial to the Bank and its shareholders, including
providing specific rights (such as Board representation) to
certain categories of investors as they may consider appropriate
and in the best interest of the Bank and its shareholders.
7. TO AUTHORISE the Company in accordance with its Regulations
and subject to Section 61 of the Companies Act, 1963(ACT 179),
to make market purchases of the Company’s ordinary shares up
to a maximum of 5 percent of its issued share capital and to
operate a share deals account for that purpose.
8. TO APPROVE the circulation of the Notice of General
Meetings, Profit & Loss Accounts, Balance Sheets, Reports
and any other relevant information by print or electronic means.
UT BANK ANNUAL REPORT
17
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