Abridged Report 10 Draft 1
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vision A strong financial services institution with effective presence in Nigeria, Africa and indeed all the key financial centres of the world. mission To create a unique international bank focused on providing creative solutions to customers' business problems, with an absolute commitment to quality. s Mission and Vision 03 t Results at a Glance 05 Notice of AGM 06 n Chairman's Statement 08 GMD/CEO's Review 13 Report of External Consultant on the Board Appraisal 20 e Report of Audit Committee 21 t Board of Directors 22 Management Team 23 Financials n Director's Report 26 Responsibility for Annual Financial Statement 30 o Corporate Governance 31 Frequency of Board Meetings 45 Report of the Independent Auditors 46 c Statement of Significant Accounting Policies 47 Consolidated Profit and Loss Account 57 Consolidated Balance Sheet 58 Consolidated Cash Flow Statement 59 Notes to the Consolidated Financial Statements 60 Statement of Value Added 88 Five Year Financial Summary Group 89 Five Year Financial Summary Bank 91 Financial Risk Analysis 92 Corporate Directory 109 Proxy Form 115 e-dividend form 117 Unclaimed Dividend 118 4 B GR ANK GR T GR T OUP O O T T OSS EARNINGSN(’000) OSS EARNINGSN(’000) AL ASSETS AL ASSETS N(’000) N(’000) 2006 2006 2006 21,730,220 2006 223,651,484 218,866,192 22,713,742 2007 2007 2007 2007 38,524,708 320,950,167 312,249,722 39,873,714 2008 2008 2008 2008 56,612,235 625,669,618 60,437,641 603,326,540 Apr Apr Apr Apr ’ ’ ’ ’ 2009 2009 101,659,260 2009 2009 682,077,914 650,891,836 108,979,476 Dec Dec Dec Dec ’ ’ ’ ’ 2009 2009 2009 2009 604,361,884 64,667,401 650,757,117 67,735,694 T PR T PR O O OFIT BEFORE OFIT BEFORE T T AL DEP AL DEP OSITS N(’000) OSITS N(’000) T T AX N(’000) AX N(’000) 2006 2006 2006 1,110,524 2006 144,569,685 1,379,451 148,562,796 2007 2007 2007 2007 8,792,775 211,634,824 7,640,882 217,737,408 2008 2008 2008 15,059,114 2008 16,213,791 403,710,120 419,707,636 R Apr Apr Apr esul Apr ’ 2009 ’ ’ 2009 2009 8,343,738 ’ 2009 5,901,951 444,815,118 466,889,851 t ata Dec Dec Dec Dec ’ -9,055,793 2009 -12,374,154 ’ ’ 2009 2009 449,020,259 ’ 2009 482,056,310 Glance 5 Notice of Annual General Meeting NOTICE IS HEREBY GIVEN that the 19th Annual General Meeting of DIAMOND BANK PLC will be held at Le Méridien Ibom Hotel & Golf Resort, Uyo, Akwa Ibom State of Nigeria on the 3rd day of June 2010 at 9:00 a.m. prompt, to transact the following business: AGENDA Ordinary Business 1. To receive the Report of the Directors, the Audited Financial Statements for the period ended 31st December 2009, and the Reports of the Auditors and Audit Committee thereon. 2. To elect/ re-elect Directors. 3. To authorise the Directors to fix the remuneration of the Auditors. 4. To elect the members of the Audit Committee. Special Business 5. To consider and if thought fit to pass the following as an ordinary resolution: “That the Directors' fees shall until reviewed by the Company in Annual General Meeting be and is hereby fixed at N100,000,000.00 for each financial year.” 6. To consider and if thought fit to pass the following as a special resolution: “That the Board of Directors be and are hereby authorised to convert the outstanding International Finance Corporation (IFC) loan amount of $24,545,463.80 (Twenty Four Million, Five Hundred and Forty Five Thousand, Four Hundred and Sixty Three Dollars Eighty cents) into ordinary shares of the Company at a price to be determined, and to allot such shares to IFC.” 7. To consider and if thought fit to pass the following as a special resolution: “That approval is hereby given for Diamond Bank Plc to enter into a business combination with or transfer, assign or otherwise dispose of its shareholding in any of its subsidiaries as may be determined necessary by the Board of Directors for the purpose of optimizing the business of the Diamond Bank Group; and the Directors be and are hereby authorised to execute all documents and do all such things as are necessary or incidental thereto.” Notes 1. Proxy A member of the Company entitled to attend and vote at any Annual General Meeting is entitled to appoint a proxy to attend and vote on his behalf. A proxy need not be a member of the Company. For the appointment to be valid, a completed and duly stamped proxy form must be deposited at the office of the Registrar of the Company, Diamond Registrars Limited, 59, Ogunlana Drive, Surulere, Lagos State not less than 48 hours before the time fixed for the meeting. 2. Audit Committee In accordance with Section 359 (5) of the Companies and Allied Matters Act, 1990, any shareholder may nominate a shareholder for appointment to the Audit Committee. Such nomination should be in writing and should reach the Company Secretary at least twenty one (21) days before the Annual General Meeting. 6 Notice of Annual General Meeting The Central Bank of Nigeria in its Code of Corporate Governance for Banks stipulates that some members of the Audit Committee should be knowledgeable in internal control process, accounting and financial matters. Consequently, we will require a detailed curriculum vita be submitted with each nomination. 3. Election/Re-election of Directors In line with the provisions of the Articles of Association the directors to retire by rotation are Mr. Chris Ogbechie and Chief John D. Edozien. Being eligible for re-election, Mr. Chris Ogbechie and Chief John D. Edozien offer themselves for re-election. 4. Closure of Register of Members The Register of Members will be closed from 27th May 2010 till 28th May 2010 to enable the Registrar update the Register. Dated this 5th day of May 2010 BY ORDER OF THE BOARD Nkechi Nwosu Company Secretary 8 Chairman's Statement Distinguished Shareholders, Ladies and Gentlemen I welcome you all to the 19th Annual General Meeting (AGM) of our Bank. This AGM is special in many respects. It is the first following the adoption of December 31st common year-end in the banking industry, bringing the period under review to eight months from May to December 2009. ore importantly, the AGM will review the Bank's Governments and central banks around the world took wide- performance during an extra-ordinarily challenging ranging policy actions to support their banking systems by Mperiod of major reforms introduced by the new providing liquidity, recapitalizing financial institutions, and Central Bank of Nigeria (CBN) Governor, Mallam Sanusi Lamido addressing decisively the problem of impaired assets. Despite Sanusi, since the second half of 2009. The reforms have these actions, financial strains remained acute in 2009, pulling significantly altered the industry structure and the down the real economy, with the international operating regulatory/supervisory framework within a very short period. environment remaining very challenging. Unemployment and its spillover effects remained major challenges in many The impact of the global economic downturn hurt many of our advanced economies, and poverty a problem to many customers, putting corporate profitability under pressure and in developing economies. turn, led to deterioration in credit quality and diminution in the value of investments. The consequent high level of provision The unprecedented stimulus packages adopted at different resulted in an overall loss position for the Diamond Bank Group. times by various governments of the world and the coordinated The financial results were very disappointing notwithstanding efforts by international bodies such as G-20, IMF and World that they reflect the impact of a weak economy. However, steps Bank started to have impact from the third quarter of 2009, as are being taken by both the Board and Management to ensure most economies showed signs of improvement. This was largely that we do not find ourselves in this unfortunate position going driven by increasing demand as well as lowered uncertainty and forward, irrespective of the vagaries of the economy. With this systemic risk in financial markets supported by huge and wide- resolve and the strategic actions we have taken so far, the Group ranging public intervention, rising commodities prices, returning has returned to the path of profitability in the first quarter of consumer confidence, and rebound in manufacturing sector and this year. I have no doubt that we will sustain satisfactory stabilizing retail sales. Indeed, the world economy is expected to performance henceforth. sustain a recovery track from 2010. The IMF in April 2010 projected that the global economic growth will rise to 4.2 To properly situate the Bank's performance, it is pertinent that I percent in 2010. first review the key developments that shaped the operating environment during the period so that we all can appreciate the The Domestic Economy - Extreme Volatility Giving Way circumstances that our Bank faced. to Recovery Global Economy - Contraction in 2009 Despite Huge The Nigerian economy had a mixed performance in 2009 as the Stimulus Packages country felt the second round effects of the global economic meltdown, especially in the later part of 2008 and 2009. As the The world output was estimated to have declined by 0.6 percent global economy began recovery, Nigeria recorded significant in 2009, the lowest level since World War II, due to the effects of growth in the second half of the year, although there were still the financial and economic crisis, which started in the United challenges.