AUDIT REPORT FY 07-FY08
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EMPOWERMENT MICRO FINANCE INSTITUTION Ltd AUDITED FINANCIAL STATEMENTS st Period ended 31 March 2008 JMC JM Chisanga and Company Chartered Public Accountants Empowerment Micro Finance Institution Limited Period ended 31st March 2008 CONTENTS PAGE Auditor's Report 1 - 2 Trustees' Responsibilites 3 Balance Sheet 4 Notes to the Financial Statements 5 - 8 Detailed Income Statement 9 Empowerment Micro Finance Institution Limited Period ended 31st March 2008 STATEMENTS OF THE BOARD OF MANAGEMENT TRUSTEE'S RESPONSIBILITIES 1 The Board Members are required to ensure that Financial Statements for each financial year are prepared which give a true and fair view of the state of affairs of the funds and of the excess of deficit of income and expenditure for the period. In preparing those Financial Statements the Members are required to:- a) select suitable accounting policies and then apply them consistently; b) make judgments and estimates that are reasonable and prudent; c) state whether applicable accounting standards have been followed, and d) prepare the ...
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EMPOWERMENT MICRO FINANCE INSTITUTION Ltd
AUDITED FINANCIAL STATEMENTS st Period ended 31 March 2008
JMC
JM Chisanga and Company Chartered Public Accountants
Empowerment Micro Finance Institution LimitedPeriod ended 31st March 2008CONTENTS Auditor's Report Trustees' Responsibilites Balance Sheet Notes to the Financial Statements Detailed Income Statement
PAGE 1 - 2 3 4 5 - 8 9
Empowerment Micro Finance Institution LimitedPeriod ended 31st March 2008STATEMENTS OF THE BOARD OF MANAGEMENT TRUSTEE'S RESPONSIBILITIES 1The Board Members are required to ensure that Financial Statements for each financial year are prepared which give a true and fair view of the state of affairs of the funds and of the excess of deficit of income and expenditure for the period. In preparing those Financial Statements the Members are required to:- a) select suitable accounting policies and then apply them consistently; b) make judgments and estimates that are reasonable and prudent; c) state whether applicable accounting standards have been followed, and d) prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the Project will continue with its activities. 2The Board Members are responsible for the keeping of proper accounting records which disclose with reasonable accuracy at any time the financial position of the project and enable them to ensure that the Financial Statements comply with the Companies Act. They are also responsible for safe guarding the assets of the project and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
3The Board Members confirm that in their opinion, a) the financial statements give a true and fair view of the state of the project's affairs at 31 March 2008 and of its surplus for the period ended; b) at the date of this statement, there were reasonable grounds to believe that the project will be able to pay its debts as and when these fall due; and c) the financial statements are drawn up in accordance with applicable accounting standards This statement is made in accordance with a resolution of the Board of Directors. signed at ………………………………………………………….. on …………………….2008 ------------------------------------ …………………………………………………………………… CHAIRPERSON TREASURER
Empowerment Micro Finance Institution Limited
Balance Sheet as at 31st March 2008 Non Current AssetsCurrent Assets Sundry Debtors(Staff) 45.042.770 Debtors 376.644.539 Bank and Cash Balances 375.009.564
2008 49.064.455 796.696.873 845.761.328
2007
50.000.492 14.194.700 234.914.102 143.957.506 393.066.308 443.066.800
Current Liabilities Other 4.263.400 2.389.824 Financed by: Amounts Due more than 1 year 1.077.334 1.471.934 Institutional Funds 1.224.225.042 638.528.036 Revenue Reserves (383.804.448) (199.322.994) 845.761.328443.066.800 These Financial Statements were approved by the Board of Trustees on……………………………………………………………… And were signed on its behalf by: ………………………………………………………….) CHAIRPERSON………………………………………………………….)………………………………………………………….) TRESURER………………………………………………………….)
Empowerment Micro Finance Institution LimitedNotes to the Financial StatementsPeriod ended 31st March 20081 BackgroundEmpowerment Micro Finance Institution Limited was registered as a company limited by guarantee on 29th January 2008, under Company Registration No. 70770. Its precursor, CeLIM Microfinance Institution, the operators of the Siavonga and Gwembe Projects, was established in Zambia in the year 2001 as a Non-Governmental Organisation(NGO) under Registration No. ORS/102/81/24. Its mission (purpose) is to support the development of the country and to increase the financial sources of the poor people. "E-MFI is a non profit organisation inspired by Christian values committed to enhance accessibility to capital in order to promote financial empowerment among the people of Southern Zambia".To this end the organisation has adopted to the following vision: "A financial empowerment of the community with income opportunitiesfoe women and men in rural Zambia".2 Principal Accounting PoliciesThe Financial Statements are prepared in accordance with the historical cost convention. The following is a summary of the more important accounting policies used by the Fund. a) CurrenciesThe Financial Statements are expressed in Zambian Kwacha. Transactions in foreign currencies are recorded at the rate of exchange ruling at the date the transactions. Foreign currencies balances are translated at the rate of exchange ruling at the end of the financial year. Exchange differences arising from siavonga and Gwembe MC- Zambia bank account are dealt with in the income and expenditure account. b) DepreciationDeprecation is calculated to write off the cost of the fixed assets on a straight line basis over the expected useful lives of the assets concerned. The principal annual rates to used annually have been set as follows: Office Equipment 12% Office Furniture and fittings 5%3 IncomeIncome includes interest on loans, Bank interest and sundry income. Loan interest Income is accounted for on receipt basis.
Empowerment Micro Finance Institution LimitedNotes to the Financial StatementsPeriod ended 31st March 20084 EXCESS OF INCOME OVER EXPENDITURE Excess of income over expenditure is stated after charging: 2008 2007 DepreciationK K 1.410.220 1.410.220 5 TAXATION Taxation is charged at 30% on taxable income. 6 DEBTORS2008 2007 Trade debtors249.908.619 425.998.539 Less Provision for Doubtful Debts (49.354.000) (14.994.517) 376.644.539 234.914.102 Other Debtors Staff14.194.700 45.042.770 421.687.309 249.108.802 7 BANK AND CASH BALANCES2008 2007 Finance Bank Zambia (Gwembe Br.) 19.300.373 33.971.372 Finance Bank Zambia (Gwembe Br. FD) 102.750.000 - Finance Bank Zambia (Siav. Br.) 21.226.542 -Zambia National Commercial Bank99.930.313 205.104.544 Cash in hand 26.628.105 10.055.821 143.957.506 375.009.564
Empowerment Micro Finance Institution LimitedNotes to the Financial StatementsPeriod ended 31st March 20089 Loan Loss ProvisionLoan Loss Provision is calculated on the projected Gross Loan Portfolio for the following year, at 7% flat.
Empowerment Micro Finance Institution Limited Notes to the Financial StatementsPeriod ended 31st March 20088 Fixed AssetsEquipmentCost Office At 1st April 2007 50.757.500
Addition At 31st March 2008 Depreciation
At 1st April 2007
Charge for the year
5.022.000 55.779.500
21.744.500
6.297.140
28.041.640 Net Book Value 31st March 2008 27.737.860 Net Book Value 31st March 2007 29.013.000
Office Furniture 26.828.939 1.769.000 28.597.939 5.841.447 1.429.897 7.271.344
21.326.595 20.987.492
Total 77.586.439 6.791.000 84.377.439
27.585.947
7.727.037 35.312.984
49.064.455
50.000.492
Empowerment Micro Finance Institution LimitedIncome and Expenditure Statement for period ended 31 st March 20082008 2007 Income Interest and Fees 170.922.022 69.642.412 Other Income 3.951.170 1.682.996 174.873.192 71.325.408 Expenditure Personnel Expenses 208.496.534 72.423.214 Rent and utilities 34.538.763 34.862.693 Transportation 177.309.525 107.814.553 Office Supplies 16.062.454 9.293.540 Other Administration Expenses 32.527.980 15.162.368 Depreciation 7.727.037 7.035.947 Loan Loss Provision 65.116.755 2.218.117 541.779.048 248.810.432 (366.905.856) (177.485.024) Extraordinary Expenditure (16.898.592) (21.837.970) Excess of Expenditure over Income before Funding and Donations(383.804.448) (199.322.994) Funding from Parent Institutions 555.220.000 483.444.695 Donations to Loan Portfolio 229.800.000 - Excess of Income over Expenditure 401.215.552 284.121.701
