TABLE OF CONTENTS
I. THE SACCO COOPEDU 4II. DIRECTORS 'REPORT FOR THE YEAR ENDED 31 DECEMBER 2008 5a. Objectives of the SACCO COOPEDU 5b. List of members of governing bodies of the "SACCO COOPEDU" 5III. STATEMENT OF RESPONSIBILITIES OF DIRECTORS ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2008 7IV. INDEPENDENT AUDITOR'S REPORT TO THE CORPORATE SACCO COOPEDU 8V. RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND INDEPENDENT AUDITORS 8VI. BASIS OF OPINION 8VII. OPINION 9VIII. REVISED BALANCE SHEET AT 31 DECEMBER 2008 10IX. STATEMENT OF OPERATIONS DECEMBER 31, 2008 11X. STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2008 12XI. CASH FLOW STATEMENT 13XII. SIGNIFICANT ACCOUNTING POLICIES 14XIII. NOTES TO FINANCIAL STATEMENTS 16XIV. REPORT ON INTERNAL CONTROL OF SACCO COOPEDU 20XV. IMPLEMENTATION OF RECOMMENDATIONS OF THE LAST ACTION AUDIT REPORT 22XVI. RECOMMENDATIONS AND CONCLUSION 22ANNEXES 23
ABBREVIATIONS
SACCO: Cooperative Savings and CreditCOOPEDU: Cooperative Savings and Credit DUTERIMBERECFE: Women Business LoansCO: Credits ordinaryGEC: Group Savings and Credit
I. THE SACCO COOPEDU
SACCO COOPEDU is a microfinance institution established in 1997. Currently it has four branches namely:- The window seat- The office of City Centre- The window Remera- The window Nyabugogo
Information SACCO
Number of members on 31 December 2008: 10,955
Number of debtors at 31 December 2008: 1638
Business area:
Kigali City
Headquarters:
Kigali CityNyarugenge District
II. DIRECTORS 'REPORT FOR THE YEAR ENDED December 31, 2008
a. Objectives of the SACCO COOPEDU
The COOPEDU is a cooperative savings and credit with the development objectives of its members and particularly the promotion of female entrepreneurs with limited financial means access to funding for their projects.
b. List of members of governing bodies of the "COOPEDU SACCO"
The bodies of the SACCO COOPEDU are:- The general assembly- The Board of Directors- The Supervisory Board- The Management
Another body was put in place to support these organs mentioned above - namely:- The Credit Committee.
The members of these bodies are listed here - below:
Board of Directors of the "COOPEDU SACCO"
No. Name Date of entry into the C.A.1 UWAGIRISA Rose 20052 NDUWAYEZU Leon 20073 MUKANKUSI Coming 20064 Mujawamaliya Bertha 20065 MUKARUSHEMA Theresa 20056 MUKAKAMALI M. Goretti 20057 MBONIMPA Benoit 20058 Jean Sayinzoga 20059 MUNYANEZA Muteteli Joyce 2007
Member of the Supervisory Board of "COOPEDU SACCO"
No. Name Date of entry into the C.S.1 BUSASA Beathe 20062 NYIRANKURIZA Adele 20073 KARERA Sylvère 2007
Members of the committee's credit "COOPEDU SACCO"
No. Name Date1 Damien NIYIGENA 20072 MUKANYILIGIRA Dimitrie 20063 Mukakalisa Agnes 20064 UKWIGIZE Kézie 20065 MUTUYIMANA Speciose 2008
Manageress
Denise Murebwayire
III. STATEMENT OF RESPONSIBILITIES OF DIRECTORS ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED December 31, 2008
Law No. 05/2003 on the regulation of unions and credit and Law No. 50/2007 on the organization of cooperatives require that the directors prepare financial statements for each financial year which give a true and fair view of SACCO situation at the end of the year and its operating results for the year. It also requires that they ensure the proper maintenance of books that expose the SACCOs with reasonable accuracy the financial position of the SACCO. They are also responsible to watch over the assets of the SACCO.
The Directors accept responsibility for annual financial statements prepared in accordance with appropriate accounting policies, estimates and justified by reasonable and prudent judgments in accordance with International Financial Reporting Standards "IFRS" and according to Law No. 05/2003 on the regulation of Unions Credit and the Law No. 50/2007 on the organization of cooperative societies. As to the opinion of the directors, the financial statements give a true and fair view of the financial position of the SACCO, and results of operations. The directors also accept responsibility for the bookkeeping, which would be a basis for preparing financial statements, and the holding of adequate systems of internal financial control.
Chairman of the Board of Directors
UWAGIRISA RoseDate: March 16, 2009Secretary of the Board of Directors
Coming MUKANKUSIDate: March 16, 2009
IV. INDEPENDENT AUDITOR'S REPORT TO THE CORPORATE SACCO COOPEDU
We examined the financial statements for 2008, which were prepared according to internationally accepted accounting principles and the laws and regulations of the National Bank of Rwanda. We have obtained all information and explanations we considered necessary for our audit.
V. RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND INDEPENDENT AUDITORS
As mentioned above - the directors are responsible for preparing the financial statements give a true and fair view of the situation of the SACCO and the results of its operations. It is our responsibility to establish, based on our audit, an independent opinion on these financial statements and you share our opinion.
VI. BASIS OF OPINION
We conducted our audit in accordance with International Standards on Auditing. Those standards require that we plan and perform our audit to obtain reasonable assurance about the absence of significant errors in the financial statements. An audit includes examining, through tests, documents regarding the amounts and information in the financial statements. It also includes an assessment as to the accounting principles used and significant judgments and statements by administrators to assess a general presentation of financial statements. We believe that our audit provides a reasonable basis for our opinion. Note that an error of less than 1 / 100 of the asset is considered tolerable.
VII. OPINION
In our opinion, the books were kept and the financial statements are prepared on the basis of these books give a true and fair view of the financial position of the COOPEDU December 31, 2008 in accordance with Law No. 50/2007 on the organization of cooperatives, the law on the regulation of banks and other financial institutions as well as Instruction No. 05/2003 of the NBR on the regulation of cooperatives and savings and loan, comply with International Standards of Financial Reports "IFRS".
Kigali, March 16, 2009
CYITERETSE Marembo Hubert
VIII. REVISED BALANCE SHEET AT 31 DECEMBER 2008
Active
Account Amount
31/12/2008 31/12/2007(10) Values in cash 81 041 077 89 249 203(11 +12) 507 284 ordinary bank deposits 488 886 176 124(20) Loans net 1,494,182,247 1,089,602,296(42) Net Fixed Assets 83,737,916 40,903,984(44) Other receivables 1,865,973 6,481,826(47) Accruals 3,766,803 67,049TOTAL ASSETS 2,171,878,504 2,112,480,482
Passive
Account Amount
31/12/2008 31/12/2007(201/203) Demand deposits 1,304,677,678 1,255,051,173(204) Deposit accounts 1,370,300(205) Time deposits 161 755 797 286 359 285(208) Deposits 94 785 984 80 199 937(45) Sundry creditors 21 176 355 24 661 597(47) Accruals 20 396 836 6 370 388(53) Grants 20,028,274 27,248,240(575) Legal reserves 72 227 927 61 397 188(579) Other reserves 297 901 935 254 578 977(581) Capital 87 420 000 62 460 000(59) Net income 90 137 418 54 153 697Total 2,171,878,504 2,112,480,482
IX. STATEMENT OF OPERATIONS DECEMBER 31, 2008
Charges
Label AmountInterest paid to customers 13,006,348Other charges or fees paid 1,561,967Staff costs 157 840 261Taxes 4,389,980Rent 14,156,570Professional fees and outside services 26,694,954Other external expenses 10,467,902Operating expenses 43,771,875Depreciation and amortization 42,455,971Provisions for loans outstanding 24,739,202Loan losses 29,646,816Total 368 731 846
Products
Label AmountInterest received from financial institutions 20,084,493Interest received from customers 265 974 214Commission on service provision 30,728,388Non-bank 43,122,951Reversals of provisions for overdue loans 42,201,161Recoveries of debts written off 56,758,057Total 458 869 264
Result: 90,137,418 FRW
For approval of financial statements:
UWAGIRISA RoseChairman of the Board of Directors... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ...Date: March 16, 2009
Coming MUKANKUSISecretary of the Board of Directors... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ...Date: March 16, 2009
X. STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED December 31, 2008
Optional reserves Legal reserve fund intercooperation Provident Fund Grant Total Capital IncomeBalance at 31/12/07 206 660 859 61 397 188 29 522 981 18 395 137 62 460 000 54 153 697 27 248 240 432 589 862Allocation of income 37 907 588 10 830 739 5 415 370 -54 153 697 0Increase in capital 24,960,000 24,960,000Profit for the year 2008 90 137 418 90,137,418Cushion grant 7219966Total 244 568 447 72 227 927 34 938 351 18 395 137 87 420 000 90 137 418 20 028 274 547 687 280
XI. CASH FLOW STATEMENT
Cash at beginning 975 425 327Cash flow from operating activitiesNet income 90,137,418Increase appropriations 404,579,951Deposits increased 59,020,636Capital 42,833,932Various changes in accounts payable 3,321,240Other accounts receivable 916 099 ChangeProceeds from issue of share capital 24,960,000Net increase in cash and cash equivalents 387 099 762Cash and cash equivalents at end of year 588 325 565
XII. SIGNIFICANT ACCOUNTING POLICIES
a) Accounting policies
The financial statements have been prepared under the historical cost.
b) Creation of products
Interest on credits and loans that are accounts when received. All other products is recognized when earned.
c) Credit and loans
Loans and advances were evaluated at historical cost, less provisions for bad debts. Provisions have been made in accordance with Instruction No. 05/2003 of the National Bank of Rwanda (Artcicle 37) on the regulation of unions and credit as listed in the table here - below:
Class Description Provision
Healthy credit
A
With at least one credit term unpaid for 30 days
B25%
With at least one credit term unpaid for 90 days
C50%
With at least one credit term unpaid for 180 days
D
75%
With at least one credit term unpaid for at least a year
E100%
d) The financial statements are presented in Rwandan francs.
e) The principle of independence exercises: Income and expenses were allocated to the exercises.
f) Depreciation
The depreciation rates applied are:- Fixed costs: 10%- Hardware: 50%- Other: 25%
XIII. NOTES TO THE FINANCIAL STATEMENTS
a. Cash
Label AmountValues in hand 81,041,077Ordinary bank deposits 507 284 488Total 588 325 565
b. Provisions for bad debts
Label AmountReserves at 31/12/07 31,851,150Increase 24,739,202Dimunition (reversal of) - 42201161Provisions of 31/12/08 14,389,191
c. Accrued income
Account Account Type AmountCFE credit substitute difference in the inventory for the computerization 44,407GEC substitute difference in the inventory for the computerization 731 421CO substitute difference in the inventory for the computerization 1532580Total 2,308,408
d. Prepaid expenses
Account Account Type AmountRent City (2nd office) Payment in January and February 2009 374 000Rent first city office) Payment in January 2009 301 007Pay medical expenses in January and Feb. 2009 18 000Rent Payment Nyabugogo Jan. and Feb. 2009 360 000Rent Payment Remera Jan. and Feb. 2009 320 000Total 1,373,007
e. Accrued assets
Label AmountAccrued income 2,308,408Prepaid expenses 1,373,00785 388 different activeTotal 3,766,803
f. Sundry creditors
Label AmountAmounts owed to the State 6,729,558Welfare organizations 3,284,005Payable to staff 1035461SORAS 1439760Accrued interest payable 2,680,982Various other payables 6,006,589Total 21,176,355
g. Accruals
Label AmountAccrued expenses 10,295,013Surplus cash 794 025Miscellaneous liabilities 4,107,304Accruals 5,200,494Total 20,396,836
h. Other expenses or commissions paid
Label AmountAccount maintenance fees 55 729Cost of checkbook 10 200Various other bank charges 1,496,038Total 1,561,967i. Other external expenses
Label AmountMaintenance and repair 3094978Vehicle Insurance 1,218,791Insurance residence and transfer of funds 3,014,532Penalties and fines 314 556Other operating expenses 2,825,045Total 10,467,902
j. Operating expenses
Label AmountFresh organs 2,279,095Materials and supplies consumed 17,911,342Costs of keeping 11,421,531Marketing 1,111,500Expenses connected by various 1440374Copy Fees 5325Communication 7841088Entertainment and festivities 1724600Total 43,734,855
k. Commissions on service delivery
Label AmountCommission on Salaries 9,434,890Commission on loans 18,173,743Commission on Insurance - Credit 3119755Total 30,728,388
l. Non-banking
Label AmountAccount maintenance fees 11,533,2501,095,026 books salesCertificate of non-debt 50 000Historical costs 17 000Interest knew broken DAT 342 129Educational expenses 771 460 recordsA variety of other banking products 18848813Costs of closing accounts 320 737Other non-bank 5,678,900Gross Margin FOREX 3961642Extraordinary income 503 994Total 43,122,951
XIV. REPORT ON INTERNAL CONTROL OF SACCO COOPEDU
A. Record-keeping
The recording of transactions do not comply in some cases on the full accounts. A shortcut is made in recording transactions.
Ex:- This applies to staff salaries. The accountant who prepared the payroll, directly records the transaction on the current account of the agent. It would be better if another accountant had the menu to debit the account of the assets "Personal" by the credit of the current account of the agent.- We also mention the recording of amortization of the grant, the payment to the bank, etc..
B. The case
Cashiers do not have limits on withdrawals and payments. It is best to configure the software permission of another responsible for any ceiling set by the authorities of the SACCO.
C. Depreciation
The depreciation rates applied by the COOPEDU are those prescribed by law governing the income taxes.
But the wickets considered buildings should be considered as movable property in which these machines are fitted are not in the COOPEDU. The depreciation rate applicable is 25% instead of 5%.
D. Credit Management
The release of credit in favor of the applicant credit even if the credit for property to acquire a car, a house, etc.. The release in favor of the supplier would be a way to ensure that the purpose of credit is not diverted.
Reducing the amount requested by the member is not a good culture. The reduction of the credit sought to cripple the actuation of the project by the beneficiary of the credit. If credit is not well executed as planned, the reimbursement may be difficult.
In some cases credit is not found in the inspection report to the loan officer. The loan officer said, however, it performs each time the visit to the applicant.
In some cases credit is not found the evaluation report of the security by an expert or even the loan officer of the SACCO. Confirmation of the value of the collateral offered by the loan officer is an important element.
E. Credit management removed
The record of repayments of credits written off is made by combining the principal and interest. This does not follow from this account off-balance. It will separate the repayment of principal and interest. Loans written off in 2008 should also be inventoried in order to separate the interest and principal. This will ensure that the balance in the books is equal to the inventory.
F. Planning
SACCO COOPEDU a yearly action plan and related budget. She did not, however, a strategic plan at least for the medium term. The performance evaluation is not possible then.
G. The Supervisory Board
The supervisory board is the control after 2 months. However, it does not report for each control that is to allow the board to enforce the recommendations. The report of all the controls that are established during the meeting.
XV. IMPLEMENTATION OF RECOMMENDATIONS OF THE LAST ACTION AUDIT REPORT
The audit report of 2007 gave some recommendations. Most of them were put into action. However, the revision of laws governing COOPEDU as the procedures manual has not been made.XVI. RECOMMENDATIONS AND CONCLUSION
We performed the audit work and certification of financial statements of the COOPEDU at December 31, 2008. We issued a positive opinion about the management of the entity. The COOPEDU is well managed in general.
Some gaps identified allow us to make the following recommendations:- It will establish an accounting manual that will detail all the patterns of the accounts.- In the future, the loan officer should establish an inspection report, however, during the field visit.- The estimated value of the guarantee by the applicant for credit should be confirmed by a person designated by the SACCO.- Interest on credit accounts written off and written off loans repaid (principal) should be separated in the record to allow easy monitoring of accounts.- We must cancel the bills paid by affixing a stamp marked "PAID" on the bills paid.- It will establish a strategic plan for at least 5 years for COOPEDU, it is not appropriate to move forward without having defined the objectives in the medium term.
The COOPEDU recorded in fiscal 2008 an encouraging result. However, a problem noted in the growth of savings. Additional efforts must be conducted for this purpose. A thorough study should be conducted to see ways to continue to grow the organization.
Ultimately, we hope that the COOPEDU will do everything to maintain good practices in place and mobilize more savings. Simultaneously with the implementation of the recommendations, the SACCO will continue to move forward.
ANNEXES
CALCULATION OF SOLVENCY RATIOLine Code Description AmountI M.SRY.1 GROSS CAPITALM.SRY.12 Subscribed Capital 87,420,001Reserves and Share Premium M.SRY.13 390 158 136M.SRY.14 Provisions 14,389,191Accumulated Retained Profits M.SRY.15Net Profit After Tax M.SRY.16 for The Current Period 90,137,418I M.SRY.21 TOTAL 582 104 746M.SRY.31 II LESS DEDUCTIONSM.SRY.32 Unpaid CapitalM.SRY.33 Accumulated LossM.SRY.34 Loss for The Current PeriodM.SRY.35 Other Worthless AssetsM.SRY.51 0 TOTAL IINET WORTH M.SRY.61 III (I-II) 582 104 746TOTAL RISK WEIGHT M.SRY.71 IV ASSETS 2,178,771,842SOLVENCY RATIO M.SRY.81 V (III / IV) in 27%MINIMUM CAPITAL REQUIRED M.SRY.91 VI * 217 877 184Mr. SRY. VII SURPLUS (+) or insufficiency (-) III-VI 364 227 562
CALCULATION OF RATIO
DESCRIPTION Amount10 Notes and Coins 81,041,07711 12 Balances With Banks and Other Financial Institutions 507 284 488134 Treasury Term Loans up to 3 months 83,219,565135 Finance Loans to Other Banks FI year up to 3 months 0151 Credit Union Assets in The Group 0Performing Loans 20 to 27 months up to 3 428 896 777331 Treasury Bills up to 3 months333 Other Securities up to 3 months
TOTAL LIQUID ASSETS (A) 1100441907201 to 203 Demand Deposits 1,304,677,678204 Savings Deposits up to 3 monthsTerm Deposits Accounts and 205 (maximum 3 months) 66,606,303Collateral Deposits 208 (maximum 3 months)143 to 145 Borrowing
TOTAL LIQUID LIABILITIES (B) 1371283981
LIQUIDITY RATIO = A / B% (*) 80%
ALLOWANCE FOR DOUBTFUL ACCOUNTS
Number of Overdue Loans Outstanding Principal Balance of Loan Provision Recorded rateM.IV.1B Overdue for 30 to 89 days 18 11,467,256 2,866,814 25%M.IV.1B Overdue for 90 to 17 days 179 12,899,686 50% 6,449,843M.IV.1B Overdue for 14 days 364 6,763,379 75% 5,072,534Overdue M.IV.1B 1 year and more 100% 0M.IV.1B TOTAL 49 31 130 321 14 389 191
I. THE SACCO COOPEDU 4II. DIRECTORS 'REPORT FOR THE YEAR ENDED 31 DECEMBER 2008 5a. Objectives of the SACCO COOPEDU 5b. List of members of governing bodies of the "SACCO COOPEDU" 5III. STATEMENT OF RESPONSIBILITIES OF DIRECTORS ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2008 7IV. INDEPENDENT AUDITOR'S REPORT TO THE CORPORATE SACCO COOPEDU 8V. RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND INDEPENDENT AUDITORS 8VI. BASIS OF OPINION 8VII. OPINION 9VIII. REVISED BALANCE SHEET AT 31 DECEMBER 2008 10IX. STATEMENT OF OPERATIONS DECEMBER 31, 2008 11X. STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2008 12XI. CASH FLOW STATEMENT 13XII. SIGNIFICANT ACCOUNTING POLICIES 14XIII. NOTES TO FINANCIAL STATEMENTS 16XIV. REPORT ON INTERNAL CONTROL OF SACCO COOPEDU 20XV. IMPLEMENTATION OF RECOMMENDATIONS OF THE LAST ACTION AUDIT REPORT 22XVI. RECOMMENDATIONS AND CONCLUSION 22ANNEXES 23
ABBREVIATIONS
SACCO: Cooperative Savings and CreditCOOPEDU: Cooperative Savings and Credit DUTERIMBERECFE: Women Business LoansCO: Credits ordinaryGEC: Group Savings and Credit
I. THE SACCO COOPEDU
SACCO COOPEDU is a microfinance institution established in 1997. Currently it has four branches namely:- The window seat- The office of City Centre- The window Remera- The window Nyabugogo
Information SACCO
Number of members on 31 December 2008: 10,955
Number of debtors at 31 December 2008: 1638
Business area:
Kigali City
Headquarters:
Kigali CityNyarugenge District
II. DIRECTORS 'REPORT FOR THE YEAR ENDED December 31, 2008
a. Objectives of the SACCO COOPEDU
The COOPEDU is a cooperative savings and credit with the development objectives of its members and particularly the promotion of female entrepreneurs with limited financial means access to funding for their projects.
b. List of members of governing bodies of the "COOPEDU SACCO"
The bodies of the SACCO COOPEDU are:- The general assembly- The Board of Directors- The Supervisory Board- The Management
Another body was put in place to support these organs mentioned above - namely:- The Credit Committee.
The members of these bodies are listed here - below:
Board of Directors of the "COOPEDU SACCO"
No. Name Date of entry into the C.A.1 UWAGIRISA Rose 20052 NDUWAYEZU Leon 20073 MUKANKUSI Coming 20064 Mujawamaliya Bertha 20065 MUKARUSHEMA Theresa 20056 MUKAKAMALI M. Goretti 20057 MBONIMPA Benoit 20058 Jean Sayinzoga 20059 MUNYANEZA Muteteli Joyce 2007
Member of the Supervisory Board of "COOPEDU SACCO"
No. Name Date of entry into the C.S.1 BUSASA Beathe 20062 NYIRANKURIZA Adele 20073 KARERA Sylvère 2007
Members of the committee's credit "COOPEDU SACCO"
No. Name Date1 Damien NIYIGENA 20072 MUKANYILIGIRA Dimitrie 20063 Mukakalisa Agnes 20064 UKWIGIZE Kézie 20065 MUTUYIMANA Speciose 2008
Manageress
Denise Murebwayire
III. STATEMENT OF RESPONSIBILITIES OF DIRECTORS ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED December 31, 2008
Law No. 05/2003 on the regulation of unions and credit and Law No. 50/2007 on the organization of cooperatives require that the directors prepare financial statements for each financial year which give a true and fair view of SACCO situation at the end of the year and its operating results for the year. It also requires that they ensure the proper maintenance of books that expose the SACCOs with reasonable accuracy the financial position of the SACCO. They are also responsible to watch over the assets of the SACCO.
The Directors accept responsibility for annual financial statements prepared in accordance with appropriate accounting policies, estimates and justified by reasonable and prudent judgments in accordance with International Financial Reporting Standards "IFRS" and according to Law No. 05/2003 on the regulation of Unions Credit and the Law No. 50/2007 on the organization of cooperative societies. As to the opinion of the directors, the financial statements give a true and fair view of the financial position of the SACCO, and results of operations. The directors also accept responsibility for the bookkeeping, which would be a basis for preparing financial statements, and the holding of adequate systems of internal financial control.
Chairman of the Board of Directors
UWAGIRISA RoseDate: March 16, 2009Secretary of the Board of Directors
Coming MUKANKUSIDate: March 16, 2009
IV. INDEPENDENT AUDITOR'S REPORT TO THE CORPORATE SACCO COOPEDU
We examined the financial statements for 2008, which were prepared according to internationally accepted accounting principles and the laws and regulations of the National Bank of Rwanda. We have obtained all information and explanations we considered necessary for our audit.
V. RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND INDEPENDENT AUDITORS
As mentioned above - the directors are responsible for preparing the financial statements give a true and fair view of the situation of the SACCO and the results of its operations. It is our responsibility to establish, based on our audit, an independent opinion on these financial statements and you share our opinion.
VI. BASIS OF OPINION
We conducted our audit in accordance with International Standards on Auditing. Those standards require that we plan and perform our audit to obtain reasonable assurance about the absence of significant errors in the financial statements. An audit includes examining, through tests, documents regarding the amounts and information in the financial statements. It also includes an assessment as to the accounting principles used and significant judgments and statements by administrators to assess a general presentation of financial statements. We believe that our audit provides a reasonable basis for our opinion. Note that an error of less than 1 / 100 of the asset is considered tolerable.
VII. OPINION
In our opinion, the books were kept and the financial statements are prepared on the basis of these books give a true and fair view of the financial position of the COOPEDU December 31, 2008 in accordance with Law No. 50/2007 on the organization of cooperatives, the law on the regulation of banks and other financial institutions as well as Instruction No. 05/2003 of the NBR on the regulation of cooperatives and savings and loan, comply with International Standards of Financial Reports "IFRS".
Kigali, March 16, 2009
CYITERETSE Marembo Hubert
VIII. REVISED BALANCE SHEET AT 31 DECEMBER 2008
Active
Account Amount
31/12/2008 31/12/2007(10) Values in cash 81 041 077 89 249 203(11 +12) 507 284 ordinary bank deposits 488 886 176 124(20) Loans net 1,494,182,247 1,089,602,296(42) Net Fixed Assets 83,737,916 40,903,984(44) Other receivables 1,865,973 6,481,826(47) Accruals 3,766,803 67,049TOTAL ASSETS 2,171,878,504 2,112,480,482
Passive
Account Amount
31/12/2008 31/12/2007(201/203) Demand deposits 1,304,677,678 1,255,051,173(204) Deposit accounts 1,370,300(205) Time deposits 161 755 797 286 359 285(208) Deposits 94 785 984 80 199 937(45) Sundry creditors 21 176 355 24 661 597(47) Accruals 20 396 836 6 370 388(53) Grants 20,028,274 27,248,240(575) Legal reserves 72 227 927 61 397 188(579) Other reserves 297 901 935 254 578 977(581) Capital 87 420 000 62 460 000(59) Net income 90 137 418 54 153 697Total 2,171,878,504 2,112,480,482
IX. STATEMENT OF OPERATIONS DECEMBER 31, 2008
Charges
Label AmountInterest paid to customers 13,006,348Other charges or fees paid 1,561,967Staff costs 157 840 261Taxes 4,389,980Rent 14,156,570Professional fees and outside services 26,694,954Other external expenses 10,467,902Operating expenses 43,771,875Depreciation and amortization 42,455,971Provisions for loans outstanding 24,739,202Loan losses 29,646,816Total 368 731 846
Products
Label AmountInterest received from financial institutions 20,084,493Interest received from customers 265 974 214Commission on service provision 30,728,388Non-bank 43,122,951Reversals of provisions for overdue loans 42,201,161Recoveries of debts written off 56,758,057Total 458 869 264
Result: 90,137,418 FRW
For approval of financial statements:
UWAGIRISA RoseChairman of the Board of Directors... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ...Date: March 16, 2009
Coming MUKANKUSISecretary of the Board of Directors... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ...Date: March 16, 2009
X. STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED December 31, 2008
Optional reserves Legal reserve fund intercooperation Provident Fund Grant Total Capital IncomeBalance at 31/12/07 206 660 859 61 397 188 29 522 981 18 395 137 62 460 000 54 153 697 27 248 240 432 589 862Allocation of income 37 907 588 10 830 739 5 415 370 -54 153 697 0Increase in capital 24,960,000 24,960,000Profit for the year 2008 90 137 418 90,137,418Cushion grant 7219966Total 244 568 447 72 227 927 34 938 351 18 395 137 87 420 000 90 137 418 20 028 274 547 687 280
XI. CASH FLOW STATEMENT
Cash at beginning 975 425 327Cash flow from operating activitiesNet income 90,137,418Increase appropriations 404,579,951Deposits increased 59,020,636Capital 42,833,932Various changes in accounts payable 3,321,240Other accounts receivable 916 099 ChangeProceeds from issue of share capital 24,960,000Net increase in cash and cash equivalents 387 099 762Cash and cash equivalents at end of year 588 325 565
XII. SIGNIFICANT ACCOUNTING POLICIES
a) Accounting policies
The financial statements have been prepared under the historical cost.
b) Creation of products
Interest on credits and loans that are accounts when received. All other products is recognized when earned.
c) Credit and loans
Loans and advances were evaluated at historical cost, less provisions for bad debts. Provisions have been made in accordance with Instruction No. 05/2003 of the National Bank of Rwanda (Artcicle 37) on the regulation of unions and credit as listed in the table here - below:
Class Description Provision
Healthy credit
A
With at least one credit term unpaid for 30 days
B25%
With at least one credit term unpaid for 90 days
C50%
With at least one credit term unpaid for 180 days
D
75%
With at least one credit term unpaid for at least a year
E100%
d) The financial statements are presented in Rwandan francs.
e) The principle of independence exercises: Income and expenses were allocated to the exercises.
f) Depreciation
The depreciation rates applied are:- Fixed costs: 10%- Hardware: 50%- Other: 25%
XIII. NOTES TO THE FINANCIAL STATEMENTS
a. Cash
Label AmountValues in hand 81,041,077Ordinary bank deposits 507 284 488Total 588 325 565
b. Provisions for bad debts
Label AmountReserves at 31/12/07 31,851,150Increase 24,739,202Dimunition (reversal of) - 42201161Provisions of 31/12/08 14,389,191
c. Accrued income
Account Account Type AmountCFE credit substitute difference in the inventory for the computerization 44,407GEC substitute difference in the inventory for the computerization 731 421CO substitute difference in the inventory for the computerization 1532580Total 2,308,408
d. Prepaid expenses
Account Account Type AmountRent City (2nd office) Payment in January and February 2009 374 000Rent first city office) Payment in January 2009 301 007Pay medical expenses in January and Feb. 2009 18 000Rent Payment Nyabugogo Jan. and Feb. 2009 360 000Rent Payment Remera Jan. and Feb. 2009 320 000Total 1,373,007
e. Accrued assets
Label AmountAccrued income 2,308,408Prepaid expenses 1,373,00785 388 different activeTotal 3,766,803
f. Sundry creditors
Label AmountAmounts owed to the State 6,729,558Welfare organizations 3,284,005Payable to staff 1035461SORAS 1439760Accrued interest payable 2,680,982Various other payables 6,006,589Total 21,176,355
g. Accruals
Label AmountAccrued expenses 10,295,013Surplus cash 794 025Miscellaneous liabilities 4,107,304Accruals 5,200,494Total 20,396,836
h. Other expenses or commissions paid
Label AmountAccount maintenance fees 55 729Cost of checkbook 10 200Various other bank charges 1,496,038Total 1,561,967i. Other external expenses
Label AmountMaintenance and repair 3094978Vehicle Insurance 1,218,791Insurance residence and transfer of funds 3,014,532Penalties and fines 314 556Other operating expenses 2,825,045Total 10,467,902
j. Operating expenses
Label AmountFresh organs 2,279,095Materials and supplies consumed 17,911,342Costs of keeping 11,421,531Marketing 1,111,500Expenses connected by various 1440374Copy Fees 5325Communication 7841088Entertainment and festivities 1724600Total 43,734,855
k. Commissions on service delivery
Label AmountCommission on Salaries 9,434,890Commission on loans 18,173,743Commission on Insurance - Credit 3119755Total 30,728,388
l. Non-banking
Label AmountAccount maintenance fees 11,533,2501,095,026 books salesCertificate of non-debt 50 000Historical costs 17 000Interest knew broken DAT 342 129Educational expenses 771 460 recordsA variety of other banking products 18848813Costs of closing accounts 320 737Other non-bank 5,678,900Gross Margin FOREX 3961642Extraordinary income 503 994Total 43,122,951
XIV. REPORT ON INTERNAL CONTROL OF SACCO COOPEDU
A. Record-keeping
The recording of transactions do not comply in some cases on the full accounts. A shortcut is made in recording transactions.
Ex:- This applies to staff salaries. The accountant who prepared the payroll, directly records the transaction on the current account of the agent. It would be better if another accountant had the menu to debit the account of the assets "Personal" by the credit of the current account of the agent.- We also mention the recording of amortization of the grant, the payment to the bank, etc..
B. The case
Cashiers do not have limits on withdrawals and payments. It is best to configure the software permission of another responsible for any ceiling set by the authorities of the SACCO.
C. Depreciation
The depreciation rates applied by the COOPEDU are those prescribed by law governing the income taxes.
But the wickets considered buildings should be considered as movable property in which these machines are fitted are not in the COOPEDU. The depreciation rate applicable is 25% instead of 5%.
D. Credit Management
The release of credit in favor of the applicant credit even if the credit for property to acquire a car, a house, etc.. The release in favor of the supplier would be a way to ensure that the purpose of credit is not diverted.
Reducing the amount requested by the member is not a good culture. The reduction of the credit sought to cripple the actuation of the project by the beneficiary of the credit. If credit is not well executed as planned, the reimbursement may be difficult.
In some cases credit is not found in the inspection report to the loan officer. The loan officer said, however, it performs each time the visit to the applicant.
In some cases credit is not found the evaluation report of the security by an expert or even the loan officer of the SACCO. Confirmation of the value of the collateral offered by the loan officer is an important element.
E. Credit management removed
The record of repayments of credits written off is made by combining the principal and interest. This does not follow from this account off-balance. It will separate the repayment of principal and interest. Loans written off in 2008 should also be inventoried in order to separate the interest and principal. This will ensure that the balance in the books is equal to the inventory.
F. Planning
SACCO COOPEDU a yearly action plan and related budget. She did not, however, a strategic plan at least for the medium term. The performance evaluation is not possible then.
G. The Supervisory Board
The supervisory board is the control after 2 months. However, it does not report for each control that is to allow the board to enforce the recommendations. The report of all the controls that are established during the meeting.
XV. IMPLEMENTATION OF RECOMMENDATIONS OF THE LAST ACTION AUDIT REPORT
The audit report of 2007 gave some recommendations. Most of them were put into action. However, the revision of laws governing COOPEDU as the procedures manual has not been made.XVI. RECOMMENDATIONS AND CONCLUSION
We performed the audit work and certification of financial statements of the COOPEDU at December 31, 2008. We issued a positive opinion about the management of the entity. The COOPEDU is well managed in general.
Some gaps identified allow us to make the following recommendations:- It will establish an accounting manual that will detail all the patterns of the accounts.- In the future, the loan officer should establish an inspection report, however, during the field visit.- The estimated value of the guarantee by the applicant for credit should be confirmed by a person designated by the SACCO.- Interest on credit accounts written off and written off loans repaid (principal) should be separated in the record to allow easy monitoring of accounts.- We must cancel the bills paid by affixing a stamp marked "PAID" on the bills paid.- It will establish a strategic plan for at least 5 years for COOPEDU, it is not appropriate to move forward without having defined the objectives in the medium term.
The COOPEDU recorded in fiscal 2008 an encouraging result. However, a problem noted in the growth of savings. Additional efforts must be conducted for this purpose. A thorough study should be conducted to see ways to continue to grow the organization.
Ultimately, we hope that the COOPEDU will do everything to maintain good practices in place and mobilize more savings. Simultaneously with the implementation of the recommendations, the SACCO will continue to move forward.
ANNEXES
CALCULATION OF SOLVENCY RATIOLine Code Description AmountI M.SRY.1 GROSS CAPITALM.SRY.12 Subscribed Capital 87,420,001Reserves and Share Premium M.SRY.13 390 158 136M.SRY.14 Provisions 14,389,191Accumulated Retained Profits M.SRY.15Net Profit After Tax M.SRY.16 for The Current Period 90,137,418I M.SRY.21 TOTAL 582 104 746M.SRY.31 II LESS DEDUCTIONSM.SRY.32 Unpaid CapitalM.SRY.33 Accumulated LossM.SRY.34 Loss for The Current PeriodM.SRY.35 Other Worthless AssetsM.SRY.51 0 TOTAL IINET WORTH M.SRY.61 III (I-II) 582 104 746TOTAL RISK WEIGHT M.SRY.71 IV ASSETS 2,178,771,842SOLVENCY RATIO M.SRY.81 V (III / IV) in 27%MINIMUM CAPITAL REQUIRED M.SRY.91 VI * 217 877 184Mr. SRY. VII SURPLUS (+) or insufficiency (-) III-VI 364 227 562
CALCULATION OF RATIO
DESCRIPTION Amount10 Notes and Coins 81,041,07711 12 Balances With Banks and Other Financial Institutions 507 284 488134 Treasury Term Loans up to 3 months 83,219,565135 Finance Loans to Other Banks FI year up to 3 months 0151 Credit Union Assets in The Group 0Performing Loans 20 to 27 months up to 3 428 896 777331 Treasury Bills up to 3 months333 Other Securities up to 3 months
TOTAL LIQUID ASSETS (A) 1100441907201 to 203 Demand Deposits 1,304,677,678204 Savings Deposits up to 3 monthsTerm Deposits Accounts and 205 (maximum 3 months) 66,606,303Collateral Deposits 208 (maximum 3 months)143 to 145 Borrowing
TOTAL LIQUID LIABILITIES (B) 1371283981
LIQUIDITY RATIO = A / B% (*) 80%
ALLOWANCE FOR DOUBTFUL ACCOUNTS
Number of Overdue Loans Outstanding Principal Balance of Loan Provision Recorded rateM.IV.1B Overdue for 30 to 89 days 18 11,467,256 2,866,814 25%M.IV.1B Overdue for 90 to 17 days 179 12,899,686 50% 6,449,843M.IV.1B Overdue for 14 days 364 6,763,379 75% 5,072,534Overdue M.IV.1B 1 year and more 100% 0M.IV.1B TOTAL 49 31 130 321 14 389 191
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