Audited Financial Statements for the year ended 31st December 2020 TANZANIA MORTGAGE REFINANCE COMPANY LIMITED AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER, 2020 Table of Contents Page Abbreviations 12 Company Information 2-33-4 Directors’ Report 4-145-15 Declaration of Chief Finance Officer 1516 Auditors’ Report 16-1817-19 Statement of Profit or Loss and Comprehensive Income 1920 Statement of Financial Position 2021 Statement of Changes in Equity 2122 Statement of Cash Flows 2223 Significant Accounting Policies 23-3424-35 Notes to the Financial Statements 35-6636-67 1 ii TANZANIA MORTGAGE REFINANCE COMPANY LIMITED AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER, 2020 Abbreviations ACPA R Accounting ce terprise Resource Planning A Ban of Aric Tanzani td BOT Ban of anzania DS etr Depositor o Securities CEO Chie xecutive icer CFO Chie inance icer CMA pit rets d ecurities Autority COO Chie pertions icer CSM ontrctu ervice rin DSE Dar es aam toc cnge Plc FHF irst Housing inance o Ltd FVOCI Fair lue trough ter ompreesive Income IA Intertional Accounting tandrd IFR Intertional inancial Reporting tdrd D Managing Director MR Morte Reinance Informtion stem MTN Medium erm ote NHC Ntional ousing orportion NSSF Ntional ocial ecurit und PML Primar Mortge eder PSPF Public ervice esio und PSSSF Public ervice ocial ecurit und D ills d Deeopmet evy RA Tanzani Reeue Autority TZS Tanzani illing VA Value Added ax WCF orers Compestion und 2 1 TANZANIA MORTGAGE REFINANCE COMPANY LIMITED AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER, 2020 BOARD OF DIRECTORS S/N Name Representing Position Qualification Age Nationality 1. Mr heobald i MD, BC Chaira ceors of ciece i 45 Tanzanian Engineering Assocition of Chrtered ertiied Accountt FCCA 2. Mr rles Aani ice irman Msters o Arts- conomics 48 Tanzanian tebe Bank 3. Mr Adulmid D RD Member MA tertional ing 49 Tanzanian Nseea Bank and inance 4. Mr odre MD, DCB Member Master’s in Business 44 Tanzanian Ndlahwa Administrtion MA A 5. Ms Lilian bssy Director o Member MA- inance & ing) 44 Tanzanian Managed unds IB 6. Mr mani ohn MD, cABC Member om Accounting); A 41 Tanzanian 7. Mr David usa Chie Member Re- Master’s in Business 43 Tanzanian pertions Appoited t Administrtion MA – Ris icer im erur 020) Managemet BCP Bank 8. Mr Adre MD, eter Member MA Intertional inance) 52 imbabean Chimpodh Arique 9. Mr ilbert Chie Retil Member Appointed Master’s in Business 45 Tanzanian Mponzi Ari Banking, 04t Mrc 020 Administrtion (MA A NMB 10. Dr aulid DG, HC Member Mc M Mc LM, hD 48 Tanzanian Banyani Facilities lanning d Managemet 11. Mr jay uck Director F Member Appointed usiness Executive, ouder 53 Tanzanian 20t May 020) o Aric Ris Insurance erices imited AR) 12. Mr osep a MD, A Member Resigned duction Accounting 49 Keyan 30t April, 020) Mtemtics) 3 2 TANZANIA MORTGAGE REFINANCE COMPANY LIMITED AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER, 2020 COMPANY SECRETARY Mr Ms uenia ayo Lega unse) CHIEF OFFICERS Mr sar Mgaya ie xeutive ier Mr sad rassa ie inane icer Mr aani Mande Chie erations icer REGISTERED OFFICE 15t Flr Golden ubilee oers PSPF) io treet P Bo 539 Dar es aaam anania INDEPENDENT AUDITORS udita nternationa PP er 7t Flr aren enue/io treet P Bo 7949 Dar es aaam anania PRINCIPAL BANKERS im Ban anania imite im oer ana venue P Bo 431 Dar es aaam anania 4 3 TANZANIA MORTGAGE REFINANCE COMPANY LIMITED AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER, 2020 REPORT OF THE DIRECTORS e Diretors resent this reort and the audite inania statements for te inania ear ende 1st Deeber 020 ich islose te state f aairs o the Company. INCORPORATION e Company as incororate on 9t Januar 010 under te anania ompanies t 2002 and bean its lending operations in ovember 2011. COMPANY'S VISION To ecome te reerre sendary maret intereiar for mortae inaning in anzania COMPANY'S MISSION TMRC’s mission is to expand home ownership in Tanzania by providing long term financing to priary mortae eners PRINCIPAL ACTIVITIES e prinipa ativit o te mpany is t rovide ong term sure o unds to ans for te purose o ortae lening DIRECTORS e Diretors who ed offie during te year and at te date f tis report are sn on page 4. In arance it te mpany's rticles o ssoiation n Diretr is ue for retireent rtation. CORPORATE GOVERNANCE e Bar o M consists o 2 Diretors Apart rom te ie eutive icer no oter Diretrs hold eeutive ositions in te mpany The Board taes overal resonsibilit or te ompany, including resnsibilit or identiing e ris areas considering and onitring signiiant investment deisions onsidering signiiant inania matters and reieing te errmance of manaement usiness lans and udgets e Boar is aso resnsible r ensuring tat a compreensive syste o interna contrl poliies and reures is operative and r compliance it sound ororate governane priniples e Boar is reuire t eet at least four times a ear e Boar eegates te a t ay manaement o business t te Chie eutive ier assiste y senior anaement enior manaement is invited to atten al Bar eetings and ailitates te eetie ontrl o al te Company’s operational activities, acting as a medium of communication and coordination between all te arius usiness units e Company is committed t te priniples f eetive ororate overnance e diretors aso regnize te importane o integrit transareny and aountaility 5 4 TANZANIA MORTGAGE REFINANCE COMPANY LIMITED AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER, 2020 REPORT OF THE DIRECTORS (CONTINUED) Board Committees During the year, TMRC had three Board ub-committees whose role is to ensure a high standard of corporate governance throughout the Company. These Committees were oard udit and Ris Committee RC; oard Credit Committee CC and oard uman Resources and overnance Committee BHRC. The activities of these Committees are governed by the respective Committee Charters which are approved by the Board The three Committees report to the oard of irectors Board Audit and Risk Committee Board Audit and Risk Committee Purpose and Responsibilities The Board udit and Ris Committee reviews significant accounting policies and financial reporting systems to ensure that they are adeuate and are complied with at all times t reviews adeuacy of internal control systems and monitors implementation of actions to address issues raised by nternal and xternal auditors and regulators The Committee assists the oard in evaluation and selection of external auditors at least annually t also recommends termination of existing auditors whenever it is found that the performance is not in line with the assigned duties and responsibilities and/or there is no independence for the auditors to discharge their duties in a professional manner The nternal udit Manager reports directly to the oard udit and Ris Committee. Board Audit and Risk Committee Composition Name Detail Position Nationality Mr David usala C, EM an Chairman Re-appointed 7th Tanzanian ebruary, 020) Mr bdulmaid seela C, CRD ank Member Tanzanian Ms Lilian Mbassy Director of Member Tanzanian Managed unds, T Mr Charles tembe MD, zania ank Member Re-appointed 7th ugust, Tanzanian 2020) Mr ndrew C, helter Member imbabwean Chimphondah frique The Board udit and Ris Committee met five times during the year 6 5 TANZANIA MORTGAGE REFINANCE COMPANY LIMITED AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER, 2020 REPORT OF THE DIRECTORS (CONTINUED) Board Credit Committee Board Credit Committee Purpose and Responsibilities The main function of the Board Credit Committee is to monitor performance and uality of the credit portfolio, appraise and approve loans within its credit approval limit and to recommend to the oard for approval of facilities beyond its limit The Committee reviews Credit Policy at least once a year and ensures that it contains sound fundamental principles that facilitate identification, measurement, monitoring and control of credit ris as well as having appropriate plans and strategies for credit ris management Board Credit Committee Composition Name Detail Position Nationality Dr Maulid anyani DG, HC Chairman Tanzanian Mr ilbert Mponzi Chief Retail Tanzanian gri aning, Member ppointed 4th March, NMB 2020) Mr mani ohn MD, ancC Member Tanzanian Mr oseph ha MD, Member Resigned 0th April, 020) Kenyan Mr odfrey dalahwa MD, CB Member Tanzanian The Board Credit Committee met four times during the year The Board accepts final responsibility for the ris management and internal control systems of the Company It is the tas of management to ensure that adeuate internal financial and operational control systems are developed and maintained on an ongoing basis in order to provide reasonable assurance regarding: ● The effectiveness and efficiency of operations; ● The safeguarding of the Company’s assets; ● Compliance with applicable laws and regulations; ● The reliability of accounting records; ● Business sustainability under normal as well as adverse conditions and ● Responsible behaviour towards all stakeholders. The efficiency of any internal control system is dependent on the strict observance of prescribed measures There is always a ris of non-compliance of such measures by staff hilst no system, of internal control can provide absolute assurance against misstatement or losses, the Company system is designed to provide the oard with reasonable assurance that the procedures in place are operating effectively. 7 6 TANZANIA MORTGAGE REFINANCE COMPANY LIMITED AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER, 2020 REPORT OF THE DIRECTORS (CONTINUED) Board Governance and Human Resources Committee The main function of this Committee is to develop, review and enhance the company approach to corporate governance and human resources management practices The committee ensures that there is a succession plan for executives and other ey positions within the company t is also responsible for reviewing and recommending reward strategy ad annual compensation for the Board, senior management and other employees of the company.