SafeSave audit June 30 2005

Informations

• Publié par: Fiom
• Nombre de lectures: 94
• Langue: English

Extrait

Safe

Save Multipurpose Co-operative Society Limited

(

Safe

Save)

(Known as Nirapad Sahaj Sanchay Prokalpo Bohumukhi Samabay Samity Ltd up to

18.01.2005)

Financial Statements together with

Auditor’s Report

For the year ended 30 June 2005

AUDITOR'S REPORT

To the Executive Committee of

Safe

Save Multipurpose Co-operative Society Limited (

Safe

Save)

We have audited the accompanying Balance Sheet of

Safe

Save Multipurpose Co-operative

Society Limited (

Safe

Save) as of 30 June 2005 and the related Profit and Loss Account and

Receipts and Payments Account for the year then ended. These Financial Statements are the

responsibility of SafeSave’s management. 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 as adopted

in Bangladesh. Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the Financial Statements are free of material

misstatement. An audit includes examining, on a test basis, evidence supporting the

amounts and disclosures in the Financial Statements. An audit also includes assessing the

accounting principles used and significant estimates made by management, as well as

evaluating the overall financial presentation. We believe that our audit provides a reasonable

basis for our opinion.

We report that:

(a)

we have obtained all the information and explanations which we required;

(b)

the Balance Sheet and the Profit and Loss account referred to in the report are

drawn up in conformity with the law;

(c)

such Balance Sheet exhibits a true and correct account of the state of the co-

operative society’s affairs according to the best of our information and explanations

given to us and as shown by the books of the Society;

(d)

the books of accounts have been kept by

Safe

Save as required under the Act, the

rules and the bye-laws;

(e)

there has been no material impropriety or irregularity in the expenditure or in the

realisation of moneys due to

Safe

Save;

Dhaka,

ACNABIN & Co.

28 July 2005

Chartered Accountants

Safe

Save Multipurpose Co-operative Society Limited (

Safe

Save)

(Known as Nirapad Sahaj Sanchay Prokalpo Bohumukhi Samabay Samity Ltd. upto 18.01.05)

Balance Sheet

As on 30 June 2005

Notes

30.06.2005

30.06.2004

Taka

Taka

ASSETS

Cash & bank current accounts

3

1,580,781

1,663,827

Interest bearing deposits

4

3,400,000

1,735,787

Loan outstanding

5

20,957,156

14,634,561

Advance & deposits

176,737

107,500

Accrued interest on fixed deposits

226,213

61,900

Total current assets

26,340,887

18,203,575

Fixed assets

6

673,515

589,719

Total assets

27,014,402

18,793,294

LIABILITIES AND NET WORTH

Liabilities

Client savings

7

13,559,834

9,327,056

Interest on client savings

455,112

309,750

Member savings

8

1,003,300

3,300

Interest on member savings

29,997

-

Staff savings

595,842

520,810

Interest on staff savings

34,770

29,490

Other liabilities

9

388,514

230,773

Advance from Plan International Bangladesh

10

114,892

24,133

Total current liabilities

16,182,261

10,445,312

Borrowings

11

-

8,149,559

Total liabilities

16,182,261

18,594,871

Net worth

Accumulated profit/ (loss)

12

(217,686)

(597,877)

Grant for capital loan fund

11

9,953,559

-

Reserves

223,968

-

Statutory

186,640

-

Co-operative development fund

37,328

-

Member shares

13

872,300

796,300

Total net worth

10,832,141

198,423

Total liabilities and net worth

27,014,402

18,793,294

The accompanying notes form an integral part of the balance sheet

Stuart Rutherford

Dr. Imran Matin

Dr. Maniruzzaman

Nipun Sangma

Md. Hossin Islam

Chairman

Vice Chairman

Secretary

Director

(Ripon)

General Manager

Dhaka,

28 July 2005

2

Safe

Save Multipurpose Co-operative Society Limited (

Safe

Save)

(Known as Nirapad Sahaj Sanchay Prokalpo Bohumukhi Samabay Samity Ltd. upto 18.01.05)

Profit and Loss Account

For the year ended 30 June 2005

2004-2005

2003-2004

Taka

Taka

Financial income

Fee from loans

7,406,231

5,269,357

Service charge fee

216,780

175,350

Admission fee

44,370

33,560

Loan processing

e

fe

49,300

-

Bank interest

175,905

259,402

Total financial income

7,892,586

5,737,669

Financial cost of lending funds

Interest on client savings

627,385

348,969

Interest on staff savings

63,897

63,516

Interest on member savings

29,997

-

Rebate on fee from loans

30,815

-

Total financial cost

752,094

412,485

Gross financial margin

7,140,492

5,325,184

Loan loss provision

5.1

640,108

1,589,192

Net financial margin

6,500,384

3,735,992

Operating expenses

Staff salary

3,974,732

3,376,931

Performance bonus

542,521

365,903

Rent

480,890

430,048

Travelling and entertainment

135,306

157,833

Advertising, p

g

y

rintin and stationer

311,609

255,077

Telephone and e-mail

75,014

63,083

Bank charges

5,186

5,380

Audit fee

67,899

87,000

Insurance premium

17,888

-

Depreciation

215,012

175,700

Research and MIS develop

t

men

356,958

644,554

Miscellaneous

90,081

88,534

Total op

g

p

s

eratin ex ense

6,273,096

5,650,043

Net income from operations

227,288

(1,914,051)

Non-operating income

Grant from Plan International

356,958

1,740,446

Fee from consultancy

-

3,000

Other income

19,913

1,000

Total non-op

g

eratin income

376,871

1,744,446

Net profit/(

)

loss

604,159

(169,605)

Appropriation:

Statutory reserve

14

186,640

-

Coop

p

erative develo ment fund

14

37,328

-

Accumulated p

(

)

rofit/ loss

380,191

(169,605)

604,159

(169,605)

The accompanying notes form an integral part of the profit and loss account.

3

Safe

Save Multipurpose Co-operative Society Limited (

Safe

Save)

(Known as Nirapad Sahaj Sanchay Prokalpo Bohumukhi Samabay Samity Ltd. upto 18.01.05)

Statement of changes in equity

For the year ended 30 June 2005

Member

shares

Statutory

reserve

Cooperative

development

fund

Grant for

capital loan

fund

Accumulated

profit/(loss)

Total

Balance at 1 July 2003

24,300

-

-

(428,272)

(403,972)

Member shares

772,000

772,000

Net profit/(loss)

p

t

as er Profit and Loss Accoun

(169,605)

(169,605)

Balance at 30 June 2004

796,300

-

-

-

(597,877)

198,423

Balance at 1 July 2004

796,300

-

-

(597,877)

198,423

Net profit/(loss)

p

t

as er Profit and Loss Accoun

604,159

604,159

Member shares

76,000

76,000

Grant for capital loan fund

9,953,559

9,953,559

Reserve Fund

a. Statutory

y

p

t

@15% of current ear's rofi

186,640

(186,640)

-

b. Coop

p

erative Develo ment Fund

37,328

(37,328)

-

@3% of current year's profit

Balance at 30 June 2005

872,300

186,640

37,328

9,953,559

(217,686)

10,832,141

4

Safe

Save Multipurpose Co-operative Society Limited (

Safe

Save)

(Known as Nirapad Sahaj Sanchay Prokalpo Bohumukhi Samabay Samity Ltd. upto 18.01.05)

Receipts and Payments Account

For the year ended 30 June 2005

2004-2005

2003-2004

RECEIPTS:

Taka

Taka

Opening Balance

1,663,827

1,254,304

Cash in hand

771,800

341,322

Cash at bank

892,027

912,982

Fees from loans

7,406,231

5,269,357

Service charge fees

216,780

175,350

Fees from admission

44,370

33,560

Loan processing fee

49,300

-

Interest on fixed deposits

11,592

197,002

Borrowings

1,804,000

1,200,000

Received during the period

6,679,571

8,045,300

Payment during the period

4,875,571

6,845,300

Savings deposit

3,908,822

729,320

Received during the period

13,355,526

9,545,060

Payment during the period

9,446,704

8,815,740

Staff savings deposit

17,902

104,789

Received during the period

1,018,433

464,132

Payment during the period

1,000,531

359,343

Long term Savings deposit

(142,395)

(177,404)

Received during the period

163,225

250,861

Payment during the period

305,620

428,265

Plan Advanced

90,759

24,133

Received during the period

447,717

668,687

payment during the period

356,958

644,554

Member share

76,000

772,000

Member savings

1,000,000

-

Received during the period

1,000,000

-

payment during the period

-

-

Grant received for capital fund

-

87,666

Other income:

Fees from consultancy

-

3,000

Miscellaneous income

11,110

1,000

16,158,298

9,674,077

PAYMENTS:

Staff salary

3,857,962

3,376,931

Rent

532,240

439,048

Paper & office supplies

311,609

255,077

Communications

75,014

63,083

Travel

88,289

109,780

Bank charges

5,186

5,380

Interest paid to outgoing Staff

1,487

5,477

Fixed assets purchase

298,808

246,073

Fixed deposits

1,664,213

(2,141,723)

Savers' interest

6,869

27,758

Performance bonus

552,595

256,475

Loan:

6,962,703

5,174,649

Disbursement during the year

31,423,500

23,860,200

Repayment during the year

24,460,797

18,685,551

Miscellaneous

90,081

88,534

Refreshment

47,017

48,053

Audit fees

83,444

55,655

Closing Balance

1,580,781

1,663,827

Cash in hand

597,406

771,800

Cash at bank

983,375

892,027

16,158,298

9,674,077

5

Safe

Save Multipurpose Co-operative Society Limited (

Safe

Save)

(Known as Nirapad Sahaj Sanchay Prokalpo Bohumukhi Samabay Samity Ltd. upto 18.01.05)

Notes to the Accounts

For the period from 01 July 2004 to 30 June 2005

1.

Introduction

SafeSave is a savings based financial services provider for poor slum dwellers registered under Co-operative Societies Act, 2001 Reg.#

Dhaka-119. It began working in August, 1996 by opening a simple saving scheme with loan for the poor urban people in two unlicensed

slums at Mohammadpur, Dhaka. Subsequently it expanded its program and at present has four savings and loan products in seven

branches in the slum areas of Bauniaband, Beriband, Geneva Camp, Tikkapara, Kurmitola, Millat and Muslim in and around Dhaka city.

Muslim branch transaction was started on March 2005.

2.

Significant accounting policies

2.1

Financial statements are prepared under historical cost convention and have been prepared in accordance with applicable accounting

standards.

2.2

Fee from loans are collected in four branches monthly @ 3% per month and in three branches quarterly @ 10% per quarter and is

accounted for on cash basis.

2.3

Interest payable on savings is accrued every month and transferred to client account quarterly in three branches and annually in

remaining four.

2.4

Fixed assets

Fixed assets are stated at cost, less accumulated depreciation. A full year's depreciation is charged in the year of acquisition and none in

the year of disposal using the reducing balance method at rates shown below:

July-Dec 2004

January-June 2005

Furniture and Fittings

20%

33.33%

Computer Equipment

25%

33.33%

2.5

Previously SafeSave's financial year ended in December and accordingly audit was completed up to December 2004. As per by laws

amended on 19 January 2005 SafeSave decided to change their financial year end to June.

30.06.05

30.06.04

Taka

Taka

3.

Cash & bank current account :

Cash at bank

983,375

892,027

Cash in hand

597,406

771,800

1,580,781

1,663,827

4.

Interest bearing deposits :

These are fixed deposits with Uttara Bank, Shamoli branch, Dhaka. Interest is accounted for on cash basis for three months deposits and

accrual basis for two and three years deposits.

Period

Rate %

3 months

8.25 - 8.75

-

735,787

2 years

7.50

2,400,000

-

3 years

9.50

1,000,000

1,000,000

3,400,000

1,735,787

30.06.05

30.06.04

Taka

Taka

5.

Loan outstanding :

Opening balance

16,318,245

11,307,668

Add: disbursed during the year

31,423,500

23,860,200

Less: recovered during the year

(24,460,797)

(18,685,551)

Less: write off during the year

(1,032,704)

(164,072)

22,248,244

16,318,245

Less: Loan loss provision

(Note-5.1)

(1,291,088)

(1,683,684)

Closing balance

20,957,156

14,634,561

6

Product-wise analysis of the closing balance is shown below:

30.06.05

30.06.04

Number of

Taka

Number of

Taka

clients

clients

Second and third Product

4,491

15,804,924

3,583

11,336,378

Fourth Product

-

-

1,163

2,901,948

Sixth Product

2,158

6,443,320

1,780

2,079,919

6,649

22,248,244

6,526

16,318,245

Under second and third product a client can take loan 3 times of savings balance and must keep 1/3 of loan balance as savings all time

in three branches, and in the fourth branch (Beriband br.) a client can take loan double of savings balance and must keep 1/2 of loan

balance as savings all time. There is no fixed repayment schedule and the fee rate is 3% per month on outstanding balance. No

collateral is required for loan.

Under sixth product only one member of a household can take a loan. The loan processing fee is Tk. 50. The fee rate is 10% per

quarter on outstanding balance. Anyone paying interest for the quarter in the first month gets 10% rebate on 10%.

5.1

Provision for doubtful loans:

For 2004

Loan loss provision expense is created every month on the basis of the ratio of previous month's loan loss provision amount in the

balance sheet to the overdue loan amount. Loans with fees overdue equal to or more than 10% of the outstanding balance are treated

as overdue loans. The monthly provision rate is as follows:

Ratio of LLP to overdue loans

Monthly provision rate

Greater than one - half

0.0015

Less than one - half but greater than one - third

0.0020

Less than one - third

0.0030

For January to June 2005

Loan loss provision expense is created every month on the basis of percent of loan accounts overdue and the R2 coverage ratio of

previous month. Percent of loan overdue means ratio of number of accounts overdue to number of loans outstanding. Loans with any

amount of fees overdue are treated as overdue loans. R2 coverage ratio means ratio of loan loss reserve balance in the balance sheet to

R2. R2 means total of net capital at risk in all loan account having a fees due balance equal to 10% or more of loan balance. The

monthly provision is calculated according to the following table:

R2 coverage ratio

100%+

80-100%

60-80%

Under 60%

Percent Loan

0-5%

0.0010

0.0015

0.0020

0.0025

Accounts

5-10%

0.0015

0.0020

0.0025

0.0030

Overdue

Over 10%

0.0025

0.0030

0.0035

0.0040

Opening balance

1,683,684

258,564

Add: Provision made during the year

640,108

1,589,192

-

normal

640,108

469,192

-

additional provision of Tk. 820,000 for Kallyanpur loan loss due to slum eviction in

December 2003 and Tk. 100,000 each for Geneva, Tikkapara and Beriband branches.

-

1,120,000

2,323,792

1,847,756

Less: Bad loan written off (Kallyanpur branch closed in 2004 Tk. 841,314)

(1,032,704)

(164,072)

Closing balance

1,291,088

1,683,684

Loans are written off on death of a client and if interest payments are overdue for twelve months.

6.

Fixed assets:

Computer

Furniture

Total

Cost:

Opening balance

971,761

357,370

1,329,131

Addition during the year

262,698

36,110

298,808

Closing balance

1,234,459

393,480

1,627,939

Depreciation:

Opening balance

564,195

175,217

739,412

Addition during the year

215,012

Closing balance

564,195

175,217

954,424

Written down value 30.06.05

670,264

218,263

673,515

Written down value 30.06.04

391,345

145,102

589,719

7

7.

Client savings:

Opening balance

9,327,056

7,855,782

Add: received during the year

13,518,751

9,795,921

Add: interest transferred during the year

475,154

919,358

Less: repaid during the year

(9,761,127)

(9,244,005)

Closing balance

13,559,834

9,327,056

To ensure protection of savings SafeSave policy is to keep reserve 30% of client deposits, 10% of staff deposits, 10% of member

deposits in fixed deposits with a scheduled bank. At June 2005 there was a shortfall of Tk. 827,864 in this reserve.

Term-wise analysis of the closing balance is shown below:

30.06.05

30.06.04

Number of

Taka

Number of

Taka

Clients

Clients

Current savings

9,960

12,955,050

8,239

8,585,527

Long term savings

252

604,784

433

741,529

9,960

13,559,834

8,239

9,327,056

Current savings:

A client can deposit savings whenever s/he likes and subject to loan conditions withdraw whenever s/he likes. Interest is paid at the rate

of 6% per annum on the month-end balance. If anyone's balance is less than Tk. 1,000 s/he will not get any interest for that month and

if a client closes his/her account before 6 months s/he will not get any interest.

Interest is transferred to client's account of Kurmitola, Millat and Muslim branch (P6 br.)on every quarter end and all other branches in

January.

Long-term savings:

A member deposits a fixed amount of at least Tk.50 or multiple there of each month for period of five years. After expiry of five years

satisfactorily SafeSave will deposit the same amount every month in the account of the client. A member can close the account any time

and withdraw the account balance. No additional interest is paid on this savings.

For accounting purpose interest is calculated at the rate of 6% per annum on the month-end total savings. Reversal of accrued interest

for closed accounts is being considered.

8.

Member savings

Opening balance

3,300

3,300

Add: Received during the year from Chairman

1,000,000

-

Closing balance

1,003,300

3,300

From April 2005 interest is calculated at the rate of 8% per annum on the month-end balance and is to be transferred to members

account annually in January.

9.

Other liabilities

Provision for audit fee

51,575

31,345

Provision for performance bonus

306,124

199,428

Provision for rebate on fee from loans

30,815

-

388,514

230,773

10.

Advance from Plan International Bangladesh

Opening balance

24,133

-

Add: Received during the year

447,717

668,687

471,850

668,687

Less: Transferred to Income

(356,958)

(644,554)

Closing balance

114,892

24,133

As per Agreement with Plan International Bangladesh dated 29 September 2003 SafeSave received the fund for research and MIS

development. On 30.06.05 SafeSave has a liability of Tk. 68,600 for the 'Outreach Study' and of Tk. 85,000 for 'Software Development'.

The duration of the Agreement with plan ends on 30 June 2005, but SafeSave will approach plan for extension of Agreement period.

8

11.

Borrowings:

Opening balance

8,061,893

7,957,785

Add: Received during the year

1,804,000

1,200,000

9,865,893

9,157,785

Transferred to Income

-

(1,095,892)

Transferred to Grant capital

(9,865,893)

-

-

8,061,893

As per agreement signed on 25 August 2001 the above amount was interest free loan from Plan. Subsequently a new agreement was

signed on 29 June 2005 whereby the above amount will be considered as property of SafeSave for its use as revolving loan fund.

12.

Accumulated profit/ (loss)

Opening balance

(597,877)

(428,272)

Add: Transferred from appropriation of profit

380,191

(169,605)

Closing balance

(217,686)

(597,877)

13.

Member shares:

Name

Designation

30.06.05

30.06.04

Taka

Taka

Stuart Rutherford

Chairman

504,900

501,300

Imran Matin

Vice-chairman

10,000

1,300

Md. Maniruzzaman

Secretary

22,600

11,300

Mark Staehle

EC Member

50,000

10,000

Mosharrof Hossain

EC Member

11,300

11,300

Nazmus Sakeba

EC Member

11,000

1,000

Rabeya Islam

Member

112,300

111,300

S.K. Sinha

Member

112,300

111,300

Md. Javed Sakawat

Member

21,300

21,300

Edward M Abbey

Member

11,300

11,300

S M Rahman

Member

2,000

-

Ziauddin Ahmed

Member

2,000

1,000

Dr. Ahsan Ali

Director

1,300

1,300

Firoza Begum

Member

-

1,300

Shafiqul Haque Chowdhury

Member

-

1,300

872,300

796,300

14.

Appropriation of Net profit:

Net profit as per Profit & Loss Accounts

604,159

Add: Loan loss provision

640,108

Profit as per Cooperative Act (Section 34)

A

1,244,267

Less: Statutory Reserve (15% of A, Section 34.1 ka)

186,640

Loan loss provision

640,108

Cooperative Development fund (3% of A, Section 34.1 Ga)

37,328

864,076

Profit available for distribution before adjustment for loss b/f

B

380,191

Less: Adjustment for opening loss (50% of B, Section 34.4)

190,095

Profit available for distribution

190,095

15.

Tax status:

SafeSave has received the approval of its savings project from the District Co-operative Registrar. Under the savings project approval,

SafeSave as well as the District Co-operative Registrar considers all participants of the savings project as savings project members. With

this understanding District Co-operative Registrar refers that SafeSave will be tax exempt.

9