Audit 2003 KEP fin stats m2

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KOSOVO ENTERPRISE PROGRAM A MICRO FINANCE INSTITUTION FINANCIAL STATEMENTS 31 DECEMBER 2003 KOSOVO ENTERPRISE PROGRAM: A MICRO FINANCE INSTITUTION FINANCIAL STATEMENTS 31 DECEMBER 2003 CONTENTS PAGES General information - Report of the independent auditors - Balance sheet 1 Statement of operations 2 Statement of cash flows 3 Statement of changes in capital 4 Notes to the financial statements 5 - 20 KOSOVO ENTERPRISE PROGRAM: A MICRO FINANCE INSTITUTION STATEMENT OF OPERATIONS 31 DECEMBER 2003 GENERAL INFORMATION Organisation’s operations The Micro Finance Institution - Kosovo Enterprise Program (‘KEP’) was founded by the humanitarian organization International Catholic Migration Commission – Switzerland (‘ICMC’) in August 1999, obtaining authority to operate as a Micro Finance Institution from the Banking and Payments Authority of Kosovo (‘BPK’) on 19 May 2000 when new regulations on financial institutions came into effect in Kosovo. The KEP registered as a separate local Non-Governmental Organisation on 4 March 2003 and is registered with the BPK as a non-bank micro financial institution as defined in section 2 of Regulation 1999/21. The KEP’s principal activity is to provide financial services to the people of Kosovo. At 31 December 2003, the KEP employed 64 employees (31 December 2002: 55). Board of directors The KEP is governed by the following people: Charles Davy ...

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• Publié par: Ussu
• Nombre de lectures: 54
• Langue: English

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KOSOVO ENTERPRISE PROGRAM

A MICRO FINANCE INSTITUTION

FINANCIAL STATEMENTS

31 DECEMBER 2003

KOSOVO ENTERPRISE PROGRAM: A MICRO FINANCE INSTITUTION   FINANCIAL STATEMENTS   31 DECEMBER 2003

  CONTENTS       General information   Report of the independent auditors   Balance sheet   Statement of operations   Statement of cash flows   Statement of changes in capital   Notes to the financial statements  

 

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KOSOVO ENTERPRISE PROGRAM: A MICRO FINANCE INSTITUTION   STATEMENT OF OPERATIONS   31 DECEMBER 2003   GENERAL INFORMATION   Organisation’s operations   The Micro Finance Institution - Kosovo Enterprise Program (‘KEP’) was founded by the humanitarian organization International Catholic Migration Commission – Switzerland (‘ICMC’) in August 1999, obtaining authority to operate as a Micro Finance Institution from the Banking and Payments Authority of Kosovo (‘BPK’) on 19 May 2000 when new regulations on financial institutions came into effect in Kosovo.   The KEP registered as a separate local Non-Governmental Organisation on 4 March 2003 and is registered with the BPK as a non-bank micro financial institution as defined in section 2 of Regulation 1999/21. The KEP’s principal activity is to provide financial services to the people of Kosovo.   At 31 December 2003, the KEP employed 64 employees (31 December 2002: 55).     Board of directors The KEP is governed by the following people:   Charles Davy – Chairman ofthe Board since November 2003 Albert Ramirez – Chairman of the Board until November 2003 Muriithi Kagai – Executive Director – KEP Jane Lewis – Member of the Board Dag Sigurdson – Member of the Board Anne Sophie Laenkholm – Member of the Board Cindy Jakovac – Member of the Board     Management    The Management of the KEP comprises of the following persons:   Muriithi Kagai Executive Director George Staicu Finance and Administration Manager since July 2003 Cindy Jakovac Finance and Administration Manager up to June 2003 Leslie Enright Operations Manager since August 2003 Charles Njoroge Operations Manager up to July 2003

 

 

KOSOVO ENTERPRISE PROGRAM: A MICRO FINANCE INSTITUTION   STATEMENT OF OPERATIONS   31 DECEMBER 2003  

GENERAL INFORMATION (CONTINUED) Number of authorised offices and registered addresses   The activities of the KEP are distributed over 3 regions covering 7 branch offices throughout Kosovo:   a)   Southern Region located in Prizren, Branch offices – Prizren, Suhareka b)   Western Region located in Peja, Branch offices – Peje, Gjakova; sub-branch oficces: Klina, Istog c)   Eastern Region located in Pristina, Branch offices – Pristina, Gjilan, Mitrovica; sub-branch offices: Drenas   The head office is located in Pristina, Bedri Pejeni 4, Kosovo.

 

Note 31 December 2003  Euro 7 131,089 8 6,682 4 147,070 5 19,877  304,718

6 7 8      

322,605 6,416,568  117,775 6,856,948   7,161,666

31 December 2002 Euro 196,054 7,030 135,054  24,841  362,979

476,632 4,986,544  87,956 5,551,132 5,914,111  

KOSOVO ENTERPRISE PROGRAM: A MICRO FINANCE INSTITUTION   BALANCE SHEET         ASSETS Non-current assets   Net loans to customers Other receivables Tangible fixed assets Intangible assets   Total non-current assets     Current assets   Cash and cash equivalents Net loans to customers Other receivables and prepayments   Total current assets     Total assets   CAPITAL & LIABILITIES     Capital   Fund balance 9 3,625,489 Retained surplus 2,118,420   Total capital5,743,909   Non-current liabilities    Long term borrowings 10 1,151,264   Total non-current liabilities 1,151,264   Current liabilities   Accruals and other short term liabilities 11 39,824 Short term borrowings 10 76,669 Deferred income 12 150,000   Total current liabilities 266,493   Total liabilities1,417,757   Total capital and liabilities7,161,666   Authorised for issue by the Board of Directors, on _____________ and signed by:     Muriithi Kagai Executive Director  

3,625,489 1,332,135 4,957,624    610,334  610,334 43,276 76,669  226,208 346,153  956,487   5,914,111  

George Staicu Finance and Administrative Manager

The accompanying notes on pages 5 to 20 are an integral part of these financial statements.   (1)

KOSOVO ENTERPRISE PROGRAM: A MICRO FINANCE INSTITUTION   STATEMENT OF OPERATIONS   31 DECEMBER 2003

 Year ended Year ended  Note 31 December 2003 31 December 2002    Euro Euro   Net interest income   13   156,528,5   9,511,150   Fee income 14 239,007 217,594 Other operating income 14,228 3,999   Gross operating surplus19187,17,   1,498,337     Net bad and doubtful debts  expense/(release) 7 13,828 (59,240) Personnel costs 15 634,164 527,415 Administration expenses 16 438,722 300,965   Operating expenses7,680,114   769,140     Operating surplus/(deficit) for the  year before contributions 568,358 695,077     Contributions against operating expenses    - 15,000 Current period recognition of contributions  for the purchase of fixed assets 12 76,208 80,000   Net surplus for the year 648,358 786,285        

The accompanying notes on pages 5 to 20 are an integral part of these financial statements.  

(2)

KOSOVO ENTERPRISE PROGRAM: A MICRO FINANCE INSTITUTION   STATEMENT OF CASH FLOWS   31 DECEMBER 2003

 Year ended Year ended Note 31 December 2003 31 December 2002 Euro Euro

        Cash flows from operating activities     Net surplus from operating activities  before contributions   Adjustments for depreciation and  amortisation 4, 5 Adjustments for doubtful debts 7 Adjustments for interest income Loss on disposal of tangible fixed assets   Operating cash flows before working capital  changes Net increase in loans and advances  to customers Net decrease in other assets   Net increase in other liabilities     Net cash from operating activities      Cash flows from investing activities Purchase of tangible and intangible assets   Net cash used in investing activities      Cash flows from financing activities Proceeds from borrowings 10 Contributions against operating expenses   Net cash from financing activities      Net (decrease)/increase in cash and cash  equivalents   Cash and cash equivalents at beginning of the year   Cash and cash equivalents at end  of the year        

695,077  66,754 12,311 1,667   - 775,809   (1,365,059)  (43,449)    (3,452)   (636,151) (73,806)  (73,806)   540,930  15,000      555,930 (154,027)    476,63  2  322,605

The accompanying notes on pages 5 to 20 are an integral part of these financial statements.  

568,358 50,583 (61,672) (19,862) 1,908   539,315 (1,547,348)  346,993        27,658 (633,382) (56,179)      (56,179) 687,003  150,000     837,003 147,442    329,190  476,632  

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KOSOVO ENTERPRISE PROGRAM: A MICRO FINANCE INSTITUTION   STATEMENT OF CHANGES IN CAPITAL   31 DECEMBER 2003

        Balance at 31 December 2001     Net surplus for the year   Balance at 31 December 2002   Net surplus for the year   Balance at 31 December 2003                

Fund  balance Euro 3,625,489   -                 3,625,489 -                  3,625,489

Retained  surplus Euro 683,777  648,358 1,332,135   786,285 2,118,420 

The accompanying notes on pages 5 to 20 are an integral part of these financial statements.  

 Total Euro 4,309,266   648,358 4,957,624   786,285 5,743,909 

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KOSOVO ENTERPRISE PROGRAM: A MICRO FINANCE INSTITUTION   NOTES TO THE FINANCIAL STATEMENTS

REPORTING ENTITY   These financial statements are presented by Kosovo Enterprise Program, which is established in Kosovo as a microfinance institution.     BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS These financial statements have been prepared in accordance with, and comply with, International Financial Reporting Standards (“IFRS”). Where applicable, guidance from the Consultative Group to Assist the Poorest (CGAP), which is a consortium of donor agencies that provide recommendations of best practices for micro finance institutions, has been applied.   The accompanying financial statements are based on the accounting records of the KEP which are maintained on a going concern basis under the historical cost convention, with adjustments and reclassifications for the purpose of fair presentation in accordance with International Financial Reporting Standards. The preparation of financial statements in conformity with IFRS requires management to make prudent estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements preparation and the reported amounts of surpluses and expenses during the reporting period. Estimates have principally been made in respect of the provision for loan losses. Actual results could differ from these estimates.    The measurement currency of the KEP and the presentation currency for these financial statements is the Euro.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES   a)   Cash and cash equivalents   Cash and cash equivalents are carried in the balance sheet at cost. The KEP considers all cash at bank and in hand to be cash and cash equivalents.   b)   Tangible fixed assets   Tangible assets are recorded at purchase cost less accumulated depreciation. At each reporting date the Management assess whether there are any indicators of impairment of tangible assets. If any such indication exists, the management estimates the recoverable amount which is determined as the higher of the net selling price and its value in use. The carrying amount is reduced to the recoverable

 

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KOSOVO ENTERPRISE PROGRAM: A MICRO FINANCE INSTITUTION   NOTES TO THE FINANCIAL STATEMENTS

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)   amount and the difference is recognized as an expense (impairment loss) in the Statement of Operations. An impairment loss recognized for an asset in prior years is reversed if there has been a change in the estimates used to determine the assets recoverable amount.   Depreciation is calculated on a straight-line basis. The depreciation periods, which approximate to the estimated useful economic lives of the respective assets are as follows:   Office equipment: 4-10 years Motor vehicles: 5 years   Gains and losses on disposal of property and equipment are determined by reference to their carrying amount and are taken into account in determining operating surplus. Repairs and renewals are charged to the Statement of Operations when the expenditure is incurred.   Originated loans and provisions for loan impairment     Loans originated by the KEP by providing money directly to the borrower are categorised as loans originated by the KEP and are carried at amortised cost. A credit risk provision for loan impairment is established if there is objective evidence that the KEP will not be able to collect all amounts due. The amount of the provision is the difference between the carrying amount and the recoverable amount, being the present value of expected cash flows discounted based on the interest rate at inception. The loan loss provision also covers losses where there is objective evidence that probable losses are present in components of the loan portfolio at the balance sheet date. These have been estimated based on historical patterns of losses in each component and reflecting the current economic climate in which the borrowers operate. When a loan is not recoverable, it is written off against the related provision for impairments; subsequent recoveries are credited to the bad and doubtful debt expense in the Statement of Operations. In calculating such provision, consideration is also given to CGAP recommended guidelines and advice issued by BPK.

c) 

 

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KOSOVO ENTERPRISE PROGRAM: A MICRO FINANCE INSTITUTION   NOTES TO THE FINANCIAL STATEMENTS

e)  f)      

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)   d)   Interest income and expense   Interest income, fee income and expense in the Statement of Operations are recognised for all interest bearing instruments on an accrual basis using the fixed rate method based on the actual purchase price. Interest income is suspended when loans become doubtful of collection or as soon as the borrower defaults if earlier. Such interest income is excluded from interest income until received.   Fee income   Fee income is generally recognised on an accrual basis.   Employee benefits     Savings scheme The KEP contributes with the employee’s toward a savings scheme for all staff who continue to work with KEP for at least a two year period commencing 1 January 2003. Accruals by the KEP were backdated in 2002 to employee commencement date for all employees who commenced with the KEP prior to 1 January 2003. The KEP contributes the equivalent of 5% of each employee’s basic salary to the savings scheme. For employees who commenced with the KEP before 1 January 2003, 10% of their basic annual salary has been accrued. Employees also contribute 5% of their salary which will be paid to staff upon their exit from the KEP regardless of the period of employment. The KEP’s portion will be payable on a upwards sliding scale, after an initial 2 year period is fulfilled by the employee, where the full amount accrued will be payable to the employee on exit, but only after 6 years of employment is completed.   Income tax     The KEP is not considered to be liable for profit taxes under the present taxation system operating in Kosovo.  

g) 

 

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