ABC Holdings Limited
ABC Holdings Limited
ABC Holdings Limited
Contents 7 10 11 13 16 22 26 28 29 31 32 39 47 48 50 51 53 147 148 149 Introduction Values and Personality ABC Holdings Limited
ABC Holdings Limited
Introduction ABC Holdings is the parent company of a number of banks operating in Sub-Saharan Africa under the brand name of Af
Introduction The symbolism of our logo – creative energy, radiance and unity – inspires us to fulfil our vision of delivering w
Introduction ABC Holdings Limited
Values and Personality Our core values, the result of broad stakeholder consultation, centre on five distinct areas; INTEGRITY,
ABC Holdings Group Financial Highlights ABC Holdings Limited 11
Five year financial highlights on a historical cost basis (not IFRS inflation adjusted) Income Statement USD’000s 007 00 Restat
Salient Features Inflation adjusted BWP’000s Headline earnings Attributable profits Return on average equity Headline EPS (theb
1 ABC Holdings Limited
ABC Holdings Limited 1
Chairman’s Statement International and Regional Economic Developments World economic growth is estimated to have slowed down fr
Reflecting improved macro-economic stability, 32 out of 44 countries in SSA had single digit inflation levels in 2007. SSA (exc
Chairman’s Statement This further widened the gap between the actual inflation rate and the upper limit of the Central Bank’s 2
TANZANIA On the backdrop of agriculture recovery and improved electricity supply, Tanzania economy is estimated to have grown b
Chairman’s Statement In line with a tight monetary policy stance, the Bank of Zambia rate, or the policy interest rate was main
the first eight months of the year and was later adjusted to ZWD 30 000/1 USD. There was also an implied exchange rate system t
Directorate and Group Management ABC Holdings Limited – Board of Directors Chairman Mr O M Chidawu Mr H Buttery* Mrs D Khama* M
Board of Directors CHIDAWU, Oliver M. (Zimbabwean) - Chairman Oliver Chidawu is the Chairman of the ABC Holdings Board. Born in
Board of Directors KHAMA, Doreen (Motswana) Doreen Khama was born in Botswana in 1949. Mrs Khama is the Honorary Consul for Aus
Executive Committee DZANYA, Francis - Chief Operating Officer Francis Dzanya was born in Zimbabwe in 1960. He was appointed as
Group Companies Directorate African Banking Corporation of Botswana Limited Chairperson D Khama L Makwinja T Mothibatsela B Moy
Microfin Africa Limited Chairman L Mwafulilwa G Chabwera R Credo A Dudhia R Liebenthal I Mwanza Managing Registered address: R
Group Structure: ABC Holdings Limited ABC Holdings Limited (listed on BSE* and ZSE**) ABC Botswana ABC Mozambique ABC Tanzania
Group Management Structure*: ABC Holdings Limited Chief Executive Officer Secretary to the Board Internal Audit** Chief Financi
0 ABC Holdings Limited
Governance Structures: ABC Holdings Limited GROUP LEVEL ABC Holdings Ltd (Board of Directors) Loans Review Committee - approves
Risk and Governance Risk Management Effective risk management is critical in a complex organisation like ABC Holdings Ltd (“ABC
Board of Directors Executive Committee Loans Review Committee Risk and Audit Committee Chief Executive Officer Group Risk Group
Risk and Governance The audit plan is reviewed regularly and any changes are approved by the Risk and Audit Committee. Complian
Directors’ attendance at meetings in 007 Director Buttery Chidawu Khama Kudenga Moses Mothibatsela Munatsi Wasmus P – Present A
Risk and Governance The committee considered whether thecompany and the Group are going concerns, and recommended that the Boar
and directors. A policy is in place prohibiting directors and employees in dealing in the company’s shares when they are in pos
ABC Holdings Limited
Chief Executive Officer’s Report Attributable Profit (BWPm) and R O E (%) n 140 120 100 ABC Holdings Group once again produced
Chief Executive Officer’s Report Overview Attributable profit to shareholders at BWP 123.5 million is 44% ahead of the prior ye
Cost containment continues to improve, with the Group’s cost to income ratio declining from 50% to 47%. Group operating expense
Chief Executive Officer’s Report Deposits (BWPm) Microfin: 33m: 2% Zimbabwe: 106m: 6% Zambia: 179m: 9% • 28% growth in Deposits
Mozambique ABC Mozambique posted a net profit after tax of BWP 13.3 million, marginally ahead of BWP 13 million recorded in 200
Chief Executive Officer’s Report However of late most of the African currencies have stabilised and in a number of instances, a
In conjunction with the banking system upgrade and business process review exercise that began in 2007, Group Finance is workin
Chief Executive Officer’s Report Staff complement n n 2006 2007 109 86 37 43 33 41 28 38 11 11 142 153 • Total employee costs u
Products and Services Products and Services WHOLESALE BANKING RETAIL BANKING** • Consumer Banking Corporate Banking • Working c
Corporate Social Investment African Banking Corporation is a responsible and involved corporate citizen whose focus is on the e
was in need. The bank also contributed towards a fund-raising dinner made possible by the Sir Ketumile Masire Foundation. The F
Directors’ Responsibility Responsibility for the annual financial statements The directors are responsible for the preparation,
Directors’ Report Nature of business ABC Holdings Limited is listed on the Botswana and Zimbabwe Stock exchanges and is the hol
Directors’ Report Directors’ Emoluments Emoluments in respect of the Group directors (executive and non-executive) are shown in
Annual Financial Statements Contents 54 57 72 97 131 Independent Auditor’s Report Accounting Policies Financial Risk Management
PricewaterhouseCoopers Plot 50371 Fairground Office Park Gaborone P O Box 294 Gaborone, Botswana Telephone (267) 395 2011 Facsi
Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of the compan
ABC Holdings Limited
Accounting Policies Significant Accounting Policies Reporting entity ABC Holdings Limited (the “company”) is domiciled in Botsw
Significant Accounting Policies The preparation of consolidated financial statements in conformity with IFRS requires managemen
example, selling an insignificant amount close to maturity – it will be required to reclassify the entire category as available
Significant Accounting Policies of the total gains and losses of associates on an equity accounted basis, from the date signifi
cost of the security and other changes in the carrying amount of the security. Translation differences related to changes in th
Significant Accounting Policies Where the valuation models are considered not relevant, the instruments are measured at cost. A
difference between the transaction price and the model value is deferred. The timing of recognition of deferred day one profit
Significant Accounting Policies impairment, financial assets are grouped on the basis of similar credit risk characteristics (i
transactions, and valuation techniques, including discounted cash flow models and options pricing models, as appropriate. All d
Significant Accounting Policies (d) Derivatives that do not qualify for hedge accounting Certain derivative instruments do not
included under deposit and current accounts. Securities purchased under agreements to resell (reverse repos) are recorded as lo
Significant Accounting Policies of the software, from the date from the date that it is available for use. The estimated useful
Dividends Dividends are recognised as a liability in the period in which they are declared. Share issue costs Incremental costs
Significant Accounting Policies has expired, any payment required to be made to the lessor by way of penalty is recognised as a
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against
Financial risk management The Group’s activities expose it to a variety of financial risks and those activities involve the ana
has the power to authorise credit exposures. Each subsidiary has a credit committee which operates within the defined limits se
Financial risk management Risk limit control and mitigation policies The Group manages, limits and controls concentrations of c
The Group monitors the term to maturity of credit commitments because longer-term commitments generally have a greater degree o
Financial risk management The internal rating tool assists management to determine whether objective evidence of impairment exi
Credit risk exposures relating to on-balance sheet assets are as follows: BWP‘000s 007 00 Placements with other banks Financial
Financial risk management Nature of security held The nature of security held ranges from cash security, assets financed, bonds
(b) Loans and advances past due but not impaired Loans and advances less than 90 days past due are not considered impaired, unl
Financial risk management (c) Loans and advances individually impaired The individually impaired loans and advances before taki
Repossessed collateral During 2007, the Group obtained assets by taking possession of collateral held as security, as follows:
Financial risk management Concentration of risk of financial assets with credit risk exposure (a) Geographical sectors The foll
(b) Industry sectors The following table breaks down the Group’s main credit exposure at their carrying amounts, as categorised
Market risk The Group takes on exposure to market risks, which is the risk that the fair value or future cash flows of a financ
Concentration of currency risk: on-and-off balance sheet financial instruments At 1 December 007 BWP‘000s Cash and short term f
Financial risk management Interest rate risk Cash flow interest rate risk is the risk that the future cash flows of a financial
Sensitivity analysis of market price The Group holds listed equities with a fair value of BWP 115,878,000 (2006: BWP 71,018,000
Financial risk management The Groups’s maturity analysis (on a discounted cash flow basis) as at 1 December 007 was as follows:
Funding approach Sources of liquidity are regularly reviewed by the Asset and Liability Committees to maintain a wide diversifi
Financial risk management Off-balance sheet items (a) Loan commitments and other financial facilities The timing profile of the
Fair value of financial assets and liabilities Financial instruments not measured at fair value The table below details the car
Financial risk management Financial instruments not measured at fair value (i) Placements with other banks Placements with othe
Regulatory minimum capital adequacy ratios for the Group’s banking operations are summarised below: Historical Cost basis BWP‘0
Financial risk management Capital allocation The allocation of capital between specific operations and activities is, to a larg
00 BWP‘000s Net interest income after impairment of loans and advances Total operating income Operating profit Share of results