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TIB DFI 2017 Annual Report.Pdf 2017 Annual Report PORTFOLIO MANAGEMENT Credit Administration This department acts as the Annual Report 2017 Supporting the value chain 2017 Annual Report 1 Contents Page General information 5 Directors’ report 58 – 73 Statement of directors’ responsibility 74 Report of the controller and auditor general 75 – 76 Financial statements: Consolidated statement of profit or loss and other comprehensive income 77 Consolidated statement of financial position 80 Consolidated statement of changes in equity 81 – 82 Consolidated statement of cash flows 83 – 84 Notes to the consolidated financial statements 85– 162 Registered office Building No 3, Mlimani City Office Park Sam Nujoma Road, P.O Box 9373, Dar es Salaam. Physical address Mlimani City Office Park, Building No. 3, Sam Nujoma Road. Main bankers Bank of Tanzania, 11884 Dar es Salaam P.O. Box 2939, Dar es Salaam, Tanzania. TIB Corporate Bank Limited, Mlimani City Branch, P.O. Box 9102, Dar es Salaam, Tanzania. NBC Limited Corporate Branch P.O. Box 9062 Dar es Salaam, Tanzania Auditors Principal auditor: The Controller and Auditor General, National Audit Office, Corner of Samora Avenue/Ohio Street, P. O. Box 9080, Msasani Peninsula Area Dar es Salaam, Tanzania. Company Secretary Crispin Mwebesa P.O. Box 9373, Dar es Salaam. Other contact details Tel: (0)255 (0)22 2411101-9 Telefax: (0)255 (0)22 2411095 E-mail: [email protected] Website: www.tib.co.tz Sub-contracted auditor KPMG (Certified Public Accountants), DEVELOPMENT FINANCING The Luminary Plot No.574,Haile Selassie Road PIPE INDUSTRIES P.O. Box 1160, Dar es Salaam, Tanzania. 4 TIB Development Bank Ltd 2017 Annual Report 5 To be the Premier Development Financier in Tanzania. Transmittal Letter TIB Development Bank, P.O. Box 9373, Dar es Salaam. Hon. Dr. Philip I. Mpango (MP), Minister for Finance and Planning, P.O.Box 9111, Da es Salaam. Dear Honorable Minister, I hereby submit, on behalf of the Board of Directors, The Annual Report and Audited To provide Affordable Financial Statements of TIB Development Bank Limited for the period from 1st January to Development Financing for an 31st December 2017 as approved by the Board of Directors, on 21st June 2018. Inclusive, Diversified, Vibrant and Competitive National Yours Faithfully Economy. Integrity Excellence Innovation ………………………………………… Brig.Gen (rtd) Mabula B. Mashauri Team work Ag. Chairman of the Board of Directors Customer centric INSTITUTIONAL MANDATE TIB Development Bank is a development finance institution that is wholly owned by the Government of the United Republic of Tanzania (URT). The bank has been established and exists under the Companies Act, 2002 of the laws of Tanzania. The Government of the URT established TIB for the purpose of enhancing the process of bringing about economic growth in Tanzania through development financing, particularly in the industrial, agro-processing, infrastructure, oil and gas, and services sectors. Since 2010 TIB has positioned its self as a development finance (DFI) that champions and often leads in development projects with a mandate to provide medium and long-term financing to both public and private sectors. In addition to long term lending TIB also provides specialized development financial services including credits to SMEs, advisory services, and fund administration services. 6 TIB Development Bank Ltd 2017 Annual Report 7 Introduction It is my pleasure to present to you the Annual Report and Audited Financial Statements of the TIB Development Bank Limited, for the year ended December 2017, and also to confirm to you that the period was a success to the bank. Amidst to performance and impact presented in the Annual Report, the bank attained a number of constructive milestones in its journey to a substantive future. Economic Outlook Chairman’s Building on the success of the preceding year, the TIB’s 2017 Annual Report also reflects statement the time when monetary policy in Tanzania was geared towards aligning inflation to the medium-term target of 5% and supporting output growth projection of 7.0%. Lower than estimated, revenues across the sector during 2017 led to a greater fiscal deficit than projected with 2.1% of GDP as compared to 3.7% of GDP in 2016. Government expenditure during 2017 was 20.7% below its target, though it was 8.4% above the 2016 fiscal year performance. Brig. Gen. (rtd) Mabula B. Mashauri Chairman of the Board of Directors I feel privileged to present to you this Annual Report and the Financial Results of TIB Development Bank Limited for the year ended 31st December 2017. 8 TIB Development Bank Ltd 2017 Annual Report 9 Building on these macroeconomic indicators, the TIB’s Strategic Response as Notable Impacts Appreciation fiscal area is expected to expand noticeably in Policy Bank 2018, to 4.4% of GDP. Inflation was well contained In addition to on-going activities within Each organization undergoes continuous at an average of 5.0% during 2017, aided by low I am pleased to report that the primary objective parameters of the bank’s business environment, evolution, to ensure long-term sustainability food prices. The current account deficit narrowed of the Bank has continued to be on the growing the risk framework provides the bank the in a changing business environment. Although to 2.5% of GDP in 2017, down from 4.2% in 2016, of its loan book in a sustainable manner, while flexibility to address pressing national issues and TIB has made some achievement in 2017, it will with the decline in imports more than offsetting maintaining adequacy of its liquidity and capital providing inputs to national strategic projects, as continue to evolve in the coming future and I am the decline in exports. While the economic as required by the Bank of Tanzania. During the required by its Shareholders and the Ministry of confident that it will be able to do so successfully position is positive, largely under government year under review, the bank continued to record Finance and Planning. as evidenced by the attained achievements in the control, during the 2017 period private sector loss though to a lesser margin as compared to period under review. involvement in the country’s development the previous year’s loss. The loss was essentially During the period under review, the Bank continued to support the government’s ambitious attributed to impairment provisions resulting delivered on its strategies and programs by Finally, I wish to express my sincere appreciation investment plans, be a source of finance and from measures taken by the bank to clean up its achieving most of its major performance to the team that has enabled us make our innovation, aimed at creating jobs for new loan portfolio. To address this anomaly the bank targets while exercising its mandate to facilitate repositioning to pursue industrialization strategy entrants into the job market. intensified the process of cleaning up its balance economic growth and development. on a more strong footing. Many thanks to my sheet by instituting stringent measures to reduce fellow members of the Board of Directors for their its non-performance loans. In the year 2018, the Furthermore, the Bank sustained its drive to align support and valuable contribution during the Social and Political Overview bank expects to report a fairly good financial its direction to that of the Second National Five year, management and staff of TIB Development performance. Year Development Plan (FYDP II) and redirecting Bank for their hard work, our customers for I am pleased to report that the bank’s financing towards industries and creating an their unwavering support and lastly but not accomplishments were largely attributed to a enabling environment for the financed industries least to all our partners and stakeholders who conducive operating environment and social to carry out operations efficiently aimed at have kept their faith in us throughout this setting. Tanzania continued to enjoy political fostering backward and forward linkages in journey. I specifically thank the Government stability throughout the year 2017. This has relevant economic value chains. for its continued commitment to support TIB provided reassurance to both local and foreign Development Bank. Once again I am looking investors to set up and operate businesses in The Bank also contributed to support the forward to your continued collaboration to make Tanzania. government on its strategic projects through 2018 a very successful year. provision of technical inputs during negotiation with partners’ earmarked for major infrastructure projects. Brig. Gen. (rtd) Mabula B. Mashauri Interim Chairman of the Board of Directors TIB Development Bank Limited 10 TIB Development Bank Ltd 2017 Annual Report 11 Introduction Bank’s performance and achievements for the year 2017, recorded an impressive performance across most of all operational areas. Growth was noted in both assets with a sizeable expansion in the client base during the year compared to preceding year. Supporting implementation of the FYDPII During the period under review, the bank continued to execute its mandate in line with financial requirement for effective implementation of FYDPII that required an Managing Director’s innovative resource mobilization and financing strategy that goes beyond commonly known traditional source. In this regard, I am pleased statement to report that TIB played a role in presenting to the Government on how TIB can be used to provide alternative financing in order to enhance government development budget for financing a significant number of development projects thus supporting the government on financial resource mobilization. On the ground of such strong support, the bank’s strategy would be to complement government efforts to raise funds from international Mr. Charles G. Singili development financial institutions through MANAGING DIRECTOR, access to specific lines of credit or collaborative TIB DEVELOPMENT BANK joint finance arrangements in facilitating project preparations for a meaningful impact. 12 TIB Development Bank Ltd 2017 Annual Report 13 Overview of operating Within bank’s setting, I am pleased to report job creation.
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