ANNUAL REPORT 2017/18 1

ENAT BANK

ANNUAL 2017/18
REPORT
2 ANNUAL REPORT 2017/18

VISION
MISSION
VALUES
Vision statement
To become world class bank mainly by leveraging women’s economic capabilities

Mission statement
To remain true to our name and set a trend in the provision of best quality banking service
with special focus on the needs of women, and play a catalytic role in stimulating social,
economic development and increasing shareholders’ value .

Core Values
Authentic
Trustworthy
Excellence
Bold aspiration
Better Life
Impartiality
Teamwork
 ANNUAL REPORT 2017/18 3
Messsage from the Chairperson
5 of the Board of Directors

7 Messsage from the President

9 Financial Performance
Highlights

10 Corporate Governance

11 Banking on Women

Corporate Citizenship
15
TABLE OF CONTENTS

Financial Performance
16
Auditors’ Report
18
Independent Auditors’
22 Report
Statement of Profit
24 or Loss
Statement of Change in
26 Equity

27 Statement of Cash Flows

Notes to the Financial

28 Statements

95 የቦርድ ሰብሳቢ መልዕክት

96 የባንኩ ፕሬዚዳንት መልዕክት

ሴቶችን የሚያግዝ የዋስትና

97 ፋይናንስ መላ

99 የትርፍ እና ኪሳራ
መግለጫ

100 የሃብት እና ዕዳ
መግለጫ

101 Branch Address

4 ANNUAL REPORT 2017/18

PROMOTERS

Front: From right to left Back: From right to left

Sara Abera Amelework Gidey
Meaza Ashenafi Rahel Zewdie
Hadia [Link] Hirut Alamerew
Aster Solomon Nigest Haile
Almaz Tseham
Askale Benti
Mekiya Mamiyu
 ANNUAL REPORT 2017/18 5

MESSSAGE
FROM THE CHAIRPERSON OF
THE BOARD OF DIRECTORS
Hanna Tilahun

I would characterize the company’s financial

performance as solid. We ordinarily would have
expected to see more growth of earnings. However,
taking into consideration the lack of favorable
economic situation in the country, we consider it
positive that we maintained profitability and a return
on equity that ranks near the top of our peer group.
Nevertheless, we all know that we can do better as
our capital levels remained strong.
In pursuit of our unwavering commitment to focus
on the women market, and as the frontrunner for

I
banking on women, the bank is crafting a new women
am honored to serve as chair of the board market strategy in partnership with International
of Enat Bank ; a company with a history of Financial Corporation (IFC). The advisory services
success, unique business model, committed to engagement will provide capacity building to our
become stronger, and more customers focused than Women’s Financial Services team and women’s
ever before. ambassadors in the branches.
I can’t believe that it has been a year since almost To further complement our efforts to bring about
seven new board members including myself, as the incremental change in the Bank, we hold an
board chair, has assumed office. Our new board extended session over several days to review the
of directors brings a broad range of capabilities, three-year strategic plan and make adjustments
including expertise in financial services, risk based on the operating market environment, and
management, technology, human capital other opportunities. We are also planning to expand
management, finance and accounting, corporate strategically into newer business frontiers and value
responsibility and regulatory matters. And on propositions. To this effect, we are on the verge of
behalf of the board of directors, I am pleased to launching mobile and wallet banking service, to
report the financial performance of the company in update and transform our services, aiming for more
2017/2018. I would like to start by thanking our global standards in the new fiscal year.
valued shareholders for the faith and confidence
you have entrusted in us, and for your investment Finally, I would like to congratulate and commend
in Enat Bank. our board members and the employees of Enat
Bank for their remarkable achievement with
The Board of Directors remains focused on inspiring dedication and our shareholders for their
enhancing the company’s position to deliver long- continued investment in our Bank. We recognize
term value to our shareholders. To do this, the the commitment that you, as investors in Enat
board has held quite number of meetings to ensure Bank have made in the company to strengthen our
the continuity and sustenance of profitability. capital base. We are confident that the optimistic
The board also oversees risk management and leadership provided by our management, combined
governance, and carried out other important duties with the operational and cultural changes will mark
directly, and through Board subcommittees that 2018/2019 as a positive inflection point on our quest
have strong experienced chairs and members. to become a better company.
6 ANNUAL REPORT 2017/18

BOARD OF DIRECTORS
Wro Hanna Tilahun
Chairperson

Ato Habtu Dimtsu Wro Shitaye Hussein Wro Frehiwot Worku

Board Deputy Chair Member Member
Member

Wro Nigest Haile Amb. Konjit Ato Alemayehu Kebede Ato Eyobed Tibebu
Member Sinegiorgis Member Member Member

Wro Roman Legesse Ato Woldegabriel Naizgi Ato Itana Ayana

Member Member Member
 ANNUAL REPORT 2017/18 7

MESSAGE FROM
THE PRESIDENT
Wondwossen Teshome
constant increase which signifies our commitment in
strengthening women economic empowerment. Our
performance was solid, but we can, and should do
better. I can say without reservation that Enat Bank
today is a better company than it was a year ago, and I
am confident we will be even better a year from now.
Our plan for 2018/2019 is to focus beyond the
financial achievements; we are on the process of
crafting a new strategy which would be a tool to
attain a superlative service and efficiency in our
operations. Among the strategies and sub-strategies
are penetration into new markets through innovation
and introduction of Digital Financial Services among
which mobile banking and wallet services are our
priorities. Besides, to enhance financial inclusion, we
are working on customizing Interest Free Banking
(IFB) to be ultimately launched. Moreover, a pretty
good number of customer value proposition plans are
on table to be prioritized and included in the strategy.
Our team members are our most valuable resource,
and a key competitive advantage we cannot transform
into a better, stronger Enat Bank without their talent
and dedication.
We are committed and remain true to our name and to a course of We are driving for a consistent culture across
responsible growth, and our 2017/2018 financial results reflect that in the company, and we aim to communicate more
every dimension. effectively so that team members are clear about what
we expect of them. This is especially important in a
Our Bank’s operational achievement has been the time of transformation. We are making investments in
highest of the past four years, which reflects the our team members. We offer leadership development
strength of our inclusive business model as well as programs that serve team members with diverse
the strides we are making in transforming our bank. abilities as well as other recruiting, training and
In 2017/2018, Enat Bank registered total revenue development initiatives.
and profit growth of 45% and 47% respectively
over last year same period. In the same manner, total In closing, I want to express my appreciation to our
asset has increased to Birr 6.5 billion exhibiting Board of Directors for the knowledge, experience,
33% growth over that of last year same period, and leadership they have shown during the past year.
while the paid up capital has nearly reached Birr Special recognition goes to our employees for their
1 billion exceeding that of last year same period contributions and commitment and without a doubt,
by 27%. Despite, these facts that we all know, our they are our most important resource. Further thanks
business traverse was not easy in the past year due to our shareholders, whose unwavering confidence
to various external factors, and the situation has in our Bank, has made us to standout; and the NBE
practically narrowed the credit market. whose close supervision has helped us to comply
with all regulatory requirements.
With respect to maintaining loan quality, the ratio
of Non-performing Loan to total loans has been Thank you for placing your trust in Enat Bank, and
brought down to less than 2% which is by far lower for your support.
than the regulatory requirement, and the tolerable
target of the Bank. The financial services provided
to our women customers have also shown a
 8 ANNUAL REPORT 2017/18

Ato Wondwossen Teshome Wro Birtukan G/Egzi

President Ato Ermias Andarge
VP. Operations
VP. Corporate Sevices
MANAGEMENT TEAM

Wro Genet Hagos Ato Belay Gezahegn Wro Lelise Temesgen Wro Lealem Getachew
Chief Audit Exucutive Dir. Business Dir. Credit Management Dir. IBD
Dev’t. & Planning Dep’t Dep’t Dep’t

Wro Abeba Tesfaye Ato Haile Atfaye Ato Melese Gizaw

Ato Dinku Kasaye Dir. Women’s Financial Dir HRM & SS Dir. Risk & Compliance
Chief Information Officer Services Dep’t Dep’t

Wro Shewaye Takele

Ato Henok Yilma Dir. Legal Service
Dir. Finance & Accounts Dep’t
Dep’t
 ANNUAL REPORT 2017/18 9

Financial Performance Highlights (In Millions of Birr)

Total Assets Total Deposits

Total Loans and Advances Paid up capital

Total Income Total Expense

Profit before tax Staff Strength

 10 ANNUAL REPORT 2017/18

I. Corporate Governance Project Management

To ensure the prevalence of vigorous corporate A project office has been established for a new strategic
governance, different Board subcommittees plan formulation. The main focus of the office has
answerable to the Board have been organised. The been to bring dynamism in performances through
subcommittees comprise Board of Directors that updating the existing strategic plan and proactively
have expertise in the thematic areas of the specialised respond to the changes in the external environment.
subcommittees. The committees are expected to The new strategic plan will be expected to come out
discharge their responsibility as stated in the Corporate soon for implementation.
Governance Directive Number SBB/62/2015 of the
National Bank of Ethiopia. Besides, the project office has been given further
responsibility of launching the Interest Free banking
• Board Business Development Subcommittee: The service with all its features to enhance the financial
committee has been entrusted with the responsibility inclusion through penetration into the new market.
of reviewing all business development activities. It
has held about 11 meeting in 2017/18 FY to review The Adoption of International
different policies, proposals and the progress of
different projects as well as operational plan and Financial Reporting Standards
Budget for 2018/19. (IFRS)
• Board Audit Subcommittee: The Audit Committee The adoption of IFRS has been handled by internal
has shouldered the responsibility of providing project team and external consultant. The major
independent oversight of the Bank’s financial objective of adopting IFRS is to comply with the
reporting and internal control system and ensuring requirement of the new accounting standard. The
checks and balances within the bank. In effect, the conversion of the legacy to the new accounting
committee has held 12 meetings in the past fiscal year standard has been successfully accomplished. In this
of which four are sessions held to review quarterly respect, the 2017/18 Annual Financial Reports have
assurance reports and the rest are to deliberate various been prepared in accordance with the requirements
pertinent issues. of IFRS.
• Board Human Resources Affairs Subcommittee:
The subcommittee has made three meetings to discuss Human Resource Management
issues related to human resource developments and and Development
reward & benefits.
We believe that developed Human Capital can help
• Board Risk & Compliance Subcommittee: The harness the business to bring about real difference. In
Board Risk & Compliance Subcommittee has held capitalizing on the human resource aspect trainings
seventeen meetings in the fiscal year to assess Loan have been conducted on different core and support
Review, Risk and Compliance and Asset- Liability related topics. With respect to career development 105
Committees reports. This committee has wide ranging staff members have been promoted to new positions.
responsibilities of overviewing the maintenance In developing the human resource and enhance new
of asset quality, the assurances of compliances and skills, 57 trainings have been given under different
efficacy of liquidity management. themes. The trainings has covered wide range of
scope from general to specialised ones like leadership,
customer service, finance, information technology,
Information Technology and other packages.
Our Bank is endaeavouaring to create strong IT At present, the total number of employees as at june
platform to maintain operational reliability. On the 30,2018 has reached 468. Of the total 57% are female
front of product development, we are about to launch while the remaining 43% are male. In the fiscal year
Mobile Financial Services like mobile Banking and 99 new employees have been hired.
wallet services. In addition, system integrations with
Ethiopian Airlines, Ethiopia Commodity Exchange
(ECX) and Dangote Cement Factory are on the final
phase to go operational.
 ANNUAL REPORT 2017/18 11
II. Banking on Women
Guarantee Risk Fund
SUPPORTING LOCAL WOMEN BUSINESSES
Enat Bank is a pioneer in gender lens investing in
Since 2014/2015, our Shareholders had contributed a total of ETB 8.9 Ethiopia. This portfolio is taking specific steps to
Million investing in “Guarantee Risk Funds” special loan program for empower women, and support gender equality. Since
women-owned businesses only. launching in 2015, the Bank have provided loans to
28 women businesses, of which some were startups,
and others had existing businesses and needed an
extra working capital. Both groups have passed
through an entrepreneurship skill training program,
and participated in capacity building for business
plan development. In addition, they have completed
financial literacy training and have shown savings at
least 5% of the loan amount granted for the business.
In 2017/2018 from the loans provided in this program
5 borrowers whom their loan matured have paid –off
in full. In addition, to repaying the loans they have
also succeeded to acquiring movable collateral, and

I
created 81 new jobs. Currently the program has ETB
n this loan program, financial and non-financial 4.3 Million available in funds, and 15 businesses loan
resources are coordinated to support women applications are in processing.
enterprises that have viable business ideas, but
lack collateral. The primary goal of the program
focuses on identifying and providing solutions that
improve access to finance to women businesses and
help to solve complex economic problems.

Small Business Big Impact

“I like owning my own business…It’s all up to me”
12 ANNUAL REPORT 2017/18

Helping Women Micro-Businesses

& Communities Thrive
Our efforts in financing local women businesses are helping to drive economic development and job creation.

Linking With MFIs to Make Women Access

to Finance A Reality

Enat Bank, last year injected an extra 5 million in loans to two MFIs, Eshet and PEACE
for a total of 10 million; which in return they advanced economic mobility for 958
women’s businesses.
Through linking with MFIs, we are supporting women’s economically, helping
individuals and families solve tough challenges, and connect more deeply with people
in our community. We are also bringing mentoring, training, and funding to women,
and have allowed us to help women from all over Ethiopia grow their businesses in
their communities. Through all of these efforts, we’re helping to create more sustainable
economies and a better future for us all.

Investing in Women’s Entreprises is Helping

us Build A Brighter Future
When Lidia decided to pursue her lifelong dream of designing and selling specialty leather bags,
belt and wallet she was excited — and a little anxious.

“My first production facility was very small,”

Lidia said. “We had 4 manual machines and 3
employees. I didn’t have enough employees, and
my business started to grow. It was very scary,
and like many small businesses, I wasn’t sure we
would survive.”
Lidia heard about the Risk Fund Women’s loan
program from friends but didn’t believe a bank
can give loan with no collateral. She still came to
meet with the Women’s Financial Services Focal
contact specialist for help.
“We came into Lidia’s life at a time when her
company was experiencing tremendous growth
in the export market. She had need for financing
the purchase of 9 machineries, raw material
and working capital” said Abeba Tesfai, Enat
Bank Women Financial Services Director. “We
described how our Risk Guarantee Funds will
help her company. She applied for a loan of Birr
 ANNUAL REPORT 2017/18 13
300,000 and completed the prerequisite for the loan She trained and hired other 19 young women from
program. “It was a lot of hard work and determination, Organizations that provide training to Destitute
to spend her time in training, but it finally paid off,” Children and Women. She also, signed-up for a
she said. Her loan was approved. business scaling up training program, and started to
focus more on R&D of new products and revised her
She also became member of CAWEE, (Center for business strategy and planning.
Accelerated Women’s Economic Empowerment), &
AWEP (African Women Entrepreneurship Program)) Lidia Leather Crafts currently has a total of 19
which gave her international exposure visits to the employees, 30 machineries and ETB 3 Million in
EU markets, and the Inter Africa Trade market. capital . The business had outgrown its small business
She then was able to receive additional 18 different roots from the time it turned to Women’s Program at
machineries for leather production from JICA as a Enat Bank, and the future is simply amazing.
grant.

Lidia Leather Craft’ story illustrates how we are at our best when we work.

Lidia said
“I am lucky because I heard of the women’s Loan
program. It not only gave me access to finance to
purchase machineries with no collateral, and helped
me to the export market, but it also gave my business
the visibility to the Japan Embassy Grant competition
award for machineries which allowed me to receive 19
leather production machines.
So I consider this as a Double LUCK.
I believe that someone invisible was there to help me
as a guarantor, and my dream is to give it back and
guarantee another woman business.
It’s a unique program, and I appreciate Enat Bank.”

Customer Service and Advice

Whether we are working with an individual, a family, a small business, a growing company, or a global firm, we want to
know and understand our customers and their financial goals.

Then, to help them be financially successful, we want to provide best-

in-class service and guidance that will help them reach their goals.
Our business model enables us to advise and serve our customers
at every step of their financial lives. Take Lidia Million from Addis
Ababa who three years ago started a company called Lidia Leather
Crafts. She was a checking account customer, and she turned to our
Women’s Financial Services Team which took care of her business as
it grew. Over the last three years, Lidia Leather Craft turned to Enat
Bank Women’s Financial Services Team for advice, financing, and
services that helped her business succeed.
 14 ANNUAL REPORT 2017/18

Non Financial Services Also, the Women Financial Services Department

Director participated on a debate with Academician at
Empowering Women Through a conference that the University of Luxembourg and
the European Investment Bank Institute organized, at
Entrepreneurs Workshop the EIB headquarters in Luxembourg. The conference
We know that much of a company’s market value comes from or is was dedicated to discuss “Financing the SDGs”, with
affected by factors never reported on a balance sheet, including its social one opening session on the wide issue and three
and environmental impact.
sessions on financing 3 specific SDGs: Water (#6),
Health (#3) and Gender (#5); find ways to mobilize
finance supporting women to get access to new jobs
opportunity, and to contribute to the other SDGs.
The access to job will create a dynamic for more
independence, better health and child education.
Financial Literacy
One way we deliver on our commitment to making financial lives better
is through our free financial literacy services to our client’s specifically
marginalized women.

By simplifying complex personal finance topics

through easy-to-understand tools and videos, financial
educations empower women to understand their
These non-financial factors are equally important, financial choices, and make confident decisions about
and perhaps a better, more telling measure of the their personal finances. Year- to date , we extended
degree to which companies approach business in financial literacy seminars to 27358 women.
support of returns that are more reliably sustainable.
Financial literacy is also available for other
Yet companies create value across multiple
customers and non-customers alike. However, for
dimensions, and our prosperity is linked inextricably
women customers, it’s embedded in our non-financial
to the communities we serve and the challenges they
services and its offerings, budgeting tool, which
face. The value we create must also be shared to be
puts timely information at clients’ fingertips to help
sustainable long-term.
them improve their financial outcomes. And we see
The biggest impact we make is through providing evidence that it is helping. Especially those who
non-financial services to address major economic participated in the financial education seminaries are
issues, which the Small & Medium Enterprises growing their saving balances.
faces, especially women entrepreneurs. Such as
This is particularly important for anyone looking to
entrepreneurship skill, networking, access to market,
improve their financial footing, such as young adults
others enabling environment, and of course increased
looking to start a new business, or those who are
financing which is exactly what is needed to move
smart savers. That is why financial literacy seminar is
the needle on these major challenges. We are excited
part of our broader women empowerment approach to
that we are exploring innovative ways to get the
provide women clients and women small businesses
whole financial community — government agencies,
financial expertise, tools, and products tailored to
nonprofits, private equity and major investors and
help them achieve their specific financial goals.
insurance company to think about addressing these
issues with us. If we can continue to build partnerships
that embrace these new financial structures, we can
have a meaningful impact on our empowering women
businesses challenges while ensuring good value for
our clients and shareholders.
During 2017/2018, the Bank participated in Small &
medium Banking Forum, in Rwanda; Women Political
Leader Global Forum Focus session on ‘Money or
Mentorship’? How politicians and financiers can
team up to ensure financial inclusion and economic
empowerment for women.
 ANNUAL REPORT 2017/18 15
III. Corporate Citizenship
We want to make every community in which we live and do business organized by Green Life, Diplomatic bazar, organized
better, through the products and services we offer, the way we operate, our
support of diversity and inclusion, and our many forms of philanthropy. by diplomatic Spouses Group of Ethiopia (DSGE);
and Days for Girls International. The objective of the
In 2017/2018, our bank contributed nearly ETB first event was to provide awareness of Mothers and
1 Million in donation and sponsorship funding to Mothers-To-Be wellbeing at our community. Woy
support needy communities directly and through Birtukan G/Egzi, Vice President of Operations, Enat
humanitarian organizations. For example, Macedonia Bank was the guest speaker at the event.
Home of the Elderly & Mentally Disabled; Kidney
Failure Dialysis Charity Organization and Cheshire Also, on the celebration of Mother’s day the Bank
Services Ethiopia were the recipient of our donations. distributed branded Umbrella`s as a gift for Mothers
and women engaged in retail business that have been
In addition, our Bank supported and participated operating in the streets of Addis Ababa
at three events. “Emma” Maternal Health event

One of the
Businesses
Financed by Enat
Bank.
16 ANNUAL REPORT 2017/18

1. Financial performance
1.1. Deposit Mobilization
Total deposit has reached Birr 4.9 billion at the end of June 2018, and exhibited 33 per cent steady increase
compared to last year same period. The mix of deposits is per the Bank’s tactical objective to contain costs
in that savings deposit constitute the largest share of 44% followed by time which is 38% and demand
deposits 18% .The total number of accountholders is more than 70 thousand of which 56% are females.

Percentage Composition of Deposit by Type

1.2. Paid-up capital mobilization

Total paid up capital has reached Birr 971 million. This is an overachievement of 8% over the target of Birr
902 million. Paid up capital mobilized from Women has reached Birr 579 million or 60% of the total paid
up capital while the number of women shareholders stood at 65% of the total shareholders.
 ANNUAL REPORT 2017/18 17

1.3. Loans and advances 1.4. Revenues

Total outstanding loans and advances The bank has generated a total income of birr 750 million
stood at Birr 3.3 billion which is 10% with 2% overachievement against last year targets of Birr 736
overachievement against the target of million. Of the total income, interest income accounts 65% and
Birr 3.1 billion. Export and construction commission income constitutes about 25% while other income
sectors were the main contributors to the is about 10%.
achievement, which constituted 18.6%
and 19.6% of shares.

168 185

1.5. Expense 1.6. Profit

Total outlay for the fiscal year has reached Birr 534 million. Profit before tax is Birr 216 million. This
This is 5% below the tolerable target set. Of the total expense, indicates that there is an increment of 47%
interest expense on deposits constitutes about 58%. In this growth over that of 2016/17 fiscal year. This
regard, immense effort has been exerted to minimise the profit is the highest ever in comparison to the
cost of fund through broadening the deposit base to lessen past fiscal years. The Bank has been making
its negative impact on the profitability of the Bank. every possible effort to pay higher dividened
per share and such an effort has assisted the
Bank to sustainably register higher profit
growth every year.
However, the effort to mobilise higher paid up
capital every year to attain the level required
by the central bank has indirectly dwarfed the
ability of the Bank to pay higher dividend to
our shareholders. It should, nevertheless, be
realised that the increase in the net worth of
the Bank through capital mobilisation will in
the near future help to unleash its potential
to reward our shareholders with highly
competent dividend.
18 ANNUAL REPORT 2017/18

Auditors’ Report
2017/18
 ANNUAL REPORT 2017/18 19

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Corporate information

Directors (As of 30 June 2018)

Meaza Ashenafi Board of Director ( Chair Person) ( Resigned December 2017)

Kefyalew Zegeye Nigussie Board of Director (Member) ( Resigned December 2017)
Chanyalew Yilma Ashagre Board of Director ( Vice Chair Person) ( Resigned December 2017)
Aster Solomon Neway Board of Director (Member) ( Resigned December 2017)
Nigist Haile Goshu Board of Director (Member) (Appointed January2018
Netsanet Mengistu Almaw Board of Director (Member) ( Resigned December 2017)
Kongit Sinegiorgis W/Mariam (Amb) Board of Director (Member) ( Appointed January 2018)
Kassahun Abberu Wolde (Dr.) Board of Director (Member) ( Resigned December 2017)
Winta Yohannes Girmay Board of Director (Member) ( Resigned December 2017)
Hana Tilahun Tefera Board of Director ( Chair Person) (Appointed January2018
Alemayehu Kebede Beshah Board of Director (Member) (Appointed January2018
Assefa Bekele Board of Director (Member) ( Resigned February 2016)
Mekete Shiferaw Board of Director (Member) ( Resigned February 2016)
Frehiwot Worku Beyene Board of Director (Member) (Appointed January2018
Eyobed Tibebu Lisanework Board of Director (Member) (Appointed January2018
Welde Gebreal Nizigi Board of Director (Member) (Appointed January2018
Itana Ayana Leta Board of Director (Member) (Appointed January2018
Roman Legesse W/Gebreal Board of Director (Member) (Appointed January2018
Shitaye Hussen Ahmed Board of Director (Member) (Appointed January2018
Habtu Dimsu Werese Board of Director ( Vice Chair Person) (Appointed January2018

Executive management (As of 30 June 2018 )

Wondwossen Teshome Tesema President (Appointed February 2014)

Birtukan Gebreegzi Gebretekle Vice President (Appointed Novembe 2011)
Ermias Andarge Ayele Vice President (Appointed September 2012)
Lealem Getachew Fikre Director, International Banking Department (Appointed January 2013)
Dinku Kassaye Habtemariam Chief Information Officer (Appointed March 2013)
Lelise Temesgen Tucho Director,Credit Management Department (Appointed September 2012)
Melese Gizaw Desta Director, Risk & Compliance Management Department (Appointed September 2012)
Shewaye Takele Gebreyes Director, Legal Services Department (Appointed October 2013)
Haile Atfaye Ayele Director, Human Resource Management & support Services (Appointed May 2014)
Genet Hagos Gebremedhin Director, Internal Audit Department (Appointed January 2015)
Belay Gezahegn Demeke Director, Business Development & Planning Department (Appointed May 2015)
Henok Yilma Haileselassie Director, Finance and Accounts Department (Appointed May 2015)
Abeba Tesfai Nugussie Director, Women Financial Services Department (Appointed August 2015)

Independent auditor

Degefa and Tewodros Audit Service

P.O Box 8118

Addis Ababa
Ethiopia

Enat Bank Share Company

Kirkos sub-city,Woreda 08,Around Bambiss Bridge
P O Box 18401
Addis Ababa, Ethiopia

Principal bankers

Berhan International Bank

TK International building
China - Africa Square
P.O Box 387 - 1110
Addis Ababa, Ethiopia

Oromia International Bank

Ras Abebe Aragay St Senga
Infont Addis Ababa University college of commerce
P.O Box 27520 - 1000
Addis Ababa, Ethiopia
20 ANNUAL REPORT 2017/18

Enat Bank
Enat Bank Share
Share Company
Company
IFRS
IFRS Financial Statements
financial statements
For
Forthe Periodended
the period Ended 30 June
30 June 2018 2018
Report
Report ofofthe
the directors
directors

The directors submit their report together with the financial statements for the period ended 30 June 2018, to the
members of Enat Bank (" the Bank"). This report discloses the financial performance and state of affairs of the Bank

Incorporation and address

Enat Bank was incorporated in Ethiopia in 2011 by eleven visionary Ethiopian women who envisioned of creating a
fully-fledged commercial bank with a special focus on women banking needs.

Principal activities
The mandate of the Bank is to provide banking services for all, with a special focus of faciltating greater access to
and use of financial services for women, and creating values for shareholders. The bank's inclusive business model
initiative involves women entrepreneurs in order to expand economic opportunities while creating value for
Ethiopia’s businesses, and society in general.

Results and dividends

The Bank's results for the year ended 30 June 2018 are set out on page 24 . The profit for the year has been
transferred to retained earnings. The summarised results are presented below.

30 June 2018 30 June 2017

Birr'000 Birr'000
Net interest income 177,465 102,768
Profit / (loss) before tax 216,524 146,510
Tax (charge) / credit (57,649) (34,307)
Profit / (loss) for the year 158,875 112,203
Other comprehensive profit / (loss) net of taxes (2,048) 91
Total comprehensive profit / (loss) for the year 156,826 112,294

Directors

The directors who held office during the year and to the date of this report are set out on page 19
1.

Date
Company Secretary
Addis Ababa, Ethiopia
 ANNUAL REPORT 2017/18 21

Enat
EnatBank
Bank Share
Share Company
Company
IFRS
IFRS Financial Statements
financial statements
For
For the period
the period ended
ended 30 June
30 June 2018 2018
Statement
Statement ofofdirectors'
directors’ responsibilities
responsibilities

In accordance with the Banking Business Proclamation No. 592/2008, the National Bank of Ethiopia (NBE) may
direct the Bank to prepare financial statements in accordance with international financial statements standards,
whether their designation changes or they are replaced, from time to time.

The Bank's president is responsible for the preparation and fair presentation of these financial statements in
conformity with accounting principles generally accepted in Ethiopia and in the manner required by the
Commercial Code of Ethiopia of 1960, and for such internal control as management determines is necessary to
enable the preparation of financial statements that are free from material misstatement, whether due to fraud or
error. The Bank is required keep such records as are necessary to:

a) exhibit clearly and correctly the state of its affairs;

b) explain its transactions and financial position; and

c) enable the National Bank to determine whether the Bank had complied with the provisions of the Banking
Business Proclamation and regulations and directives issued for the implementation the aforementioned

The Bank's president accepts responsibility for the annual financial statements, which have been prepared using
appropriate accounting policies supported by reasonable and prudent judgements and estimates, in conformity
with International Financial Reporting Standards, Banking Business Proclamation, Commercial code of 1960 and
the relevant Directives issued by the National Bank of Ethiopia.

The President is of the opinion that the financial statements give a true and fair view of the state of the financial
affairs of the company and of its profit or loss.

The President further accept responsibility for the maintenance of accounting records that may be relied upon in
the preparation of financial statements, as well as adequate systems of internal financial control.

Nothing has come to the attention of the President to indicate that the company will not remain a going concern
for at least twelve months from the date of this statement.

Signed on behalf of the Directors by:

Hanna Tilahun Wondwossen Teshome

Board Chairperson President
[Date] [Date]
22 ANNUAL REPORT 2017/18

ENAT BANK S.C.

Enat Bank Share Company
Independent
Independent auditors' reportreport
auditors’
For the period ended 30 June 2018
For the period ended 30 June 2018

We have audited the accompanying financial statements of ENAT BANK SHARE COMPANY which comprise the
statement of financial position as at 30 June 2018, the statement of comprehensive income and statement of cash
flows for the year then ended and summary of significant accounting policies and other explanatory information.

Opinion
In our opinion, the financial statements give a true and fair view of the financial position of ENAT BANK SHARE
COMPANY as at 30 June 2018 and of its financial performance and cash flows for the year then ended in
accordance with International Financial Reporting Standard (IFRS) and related interpretations as issued by
International Accounting Standard Board(IASB). As required by the commercial code of Ethiopia, based on our
audit we report as follows:
i. Pursuant to Article 375(1) of the Commercial Code of Ethiopia of 1960 and based on our reviews of the
Board of Directors’ report, we have not noted any matter that we may wish to bring to your attention.
ii. Pursuant to article 375 (2) of the Commercial Code of Ethiopia we recommend the financial statements
be approved.

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements
section of our report. We are independent of the company in accordance with the International Ethics Standards
Board for Accountants’ code of Ethics for Professional Accountants (IESBA Code) together with the ethical
requirements that are relevant to our audit of the financial statements in Ethiopia, and we have fulfilled our other
ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Ke y Audit Matter

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the financial statements of the current period. These matters were addressed in the context of our audit of the
financial statements as a whole and in forming our opinion thereon; we do not provide a separate opinion on these
matters. We have determined the matters described below to be the key audit matter to be communicated in our
report.
How our Audit Addressed the key Audit matter
Key Audit Matter We have assigned a team with vast experience of banking
The Bank has changed its Financial Reporting Framework from local business and hands-on experience on IFRS conversion
reporting practice to International Financial reporting standard process.
(IFRS) which required the bank to prepare its first IFRS compliant The bank engaged international consultancy firm
financial statements as at 30 June 2018 and the conversion process (PricewaterhouseCoopers, Pwc) to enable it to properly
also required preparation of opening Statement of Financial Position convert the accounts to IFRS requirements and concerned

Page 4
 ANNUAL REPORT 2017/18 23

as at 01 July 2016 and Comparative Financial statements for the year staffs were trained both locally and aboard to ensure
ended 30 June 2017. Due to newness of the IFRS to the Bank and the sustainability of IFRS compliance. The management of the
country as a whole, it had challenges in the area of business process, bank further explained to us that it used various
knowledge and training, market information and technology alternative ways for gathering various market information
requirements which made the conversion process and preparation of and used unobservable inputs in cases where market
the first IFRS based Financial Statement tiresome. As result, we have information was not available as per requirement of IFRS
had series of discussions with the concerned unit of the bank on the and it is also considering information system updates and
matter; reviewed relevant documents and of course the verification upgrades to enable it to comply to data requirements of
work took us much time. IFRS.

Responsibilities of Management and Those charged with Governance for the financial statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with
the accounting policies of the company and for such internal controls as management determines is necessary to enable
the preparation of financial statements that are free from material misstatements whether due to fraud or error.

In preparing the financial statements management is responsible for assessing the company’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis for
accounting unless management either intends to liquidate the company or to close operations, or has no realistic
alternative but to do so.
Those charged with governance are responsible for overseeing the company’s financial reporting process.

Auditors Responsibility for the Audit of the financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.

Degef & Tewodros Audit Services

Partnership
Chartered Certified Accountants

Addis Ababa
October 23, 2018

Page 5
24 ANNUAL REPORT 2017/18

Enat Bank Share Company

IFRS
EnatFinancial
Bank ShareStatements
Company
For thefinancial
IFRS Period Ended 30 June 2018
statements
For the period ended 30 June 2018
Statement
Statementofofprofit or
profit orloss
loss and othercomprehensive
and other comprehensiveincome
income
30 June 2018 30 June 2017
Notes Birr'000 Birr'000

Interest income 5 489,608 303,444

Interest expense 6 (312,143) (200,676)

Net interest income 177,465 102,768

Fee and commission income 7 185,463 168,280

Fee and commission expense 7 - -

Net fees and commission income 185,463 168,280

Other operating income 8 76,190 49,123

Total operating income 439,118 320,171

Loan impairment charge 9 (5,128) (11,102)

Impairment losses on other assets 10 - -

Net operating income 433,990 309,069

Personnel expenses 11 (118,196) (82,449)

Amortisation of intangible assets 19 (5,690) (5,690)
Depreciation and impairment of property, plant 20 (16,385) (12,199)
and equipment
Other operating expenses 12 (77,193) (62,221)

Profit before tax 216,524 146,510

Income tax expense 13 (57,649) (34,307)

Profit after tax 158,875 112,203

Other comprehensive income (OCI) net on income tax

Items that will not be subsequently reclassified into profit or loss:

Remeasurement gain/(loss) on retirement 24 (2,926) 130

benefits obligations
Deferred tax (liability)/asset on remeasurement 13 878 (39)
gain or loss
Remeasurement gain / (loss) on AFS assets

(2,048) 91
Total comprehensive income for the period 156,826 112,294
Basic & diluted earnings per share (Birr) 25 184 168

The notes on pages 28

10 to 91
73 are an integral part of these financial statements.
 ANNUAL REPORT 2017/18 25
Enat
Enat Bank
Bank Share
Share Company
Company
IFRS
IFRS financial
Financial statements
Statements
AsAs
atat
3030 June
June 2018
2018
Statement
Statement ofnancial
of fi financial position
position
30 June 2018 30 June 2017 1 July 2016
Notes Birr'000 Birr'000 Birr'000
ASSETS

Cash and balances with banks 14 1,307,717 1,085,418 767,434

Loans and receivables 15 3,313,951 2,450,484 1,620,487
Investment securities:
- Available for sale 17 15,902 15,270 15,270
- Loans and receivables 17 1,379,940 971,546 547,389
Other assets 18 312,343 233,253 209,935
Intangible assets 19 19,587 25,278 25,811
Property, plant and equipment 20 124,210 94,424 77,158
Current tax assets 13 - - -
Deferred tax assets 13 - - -
Acquired Asset 21 8,725 - -

Total assets 6,482,374 4,875,673 3,263,484

LIABILITIES

Deposits from customers 22 5,090,526 3,852,008 2,499,814

Current tax liabilities 13 35,998 15,106 3,092
Other liabilities 23 147,123 103,756 113,107
Retirement benefit liability 24 6,380 2,549 1,820
Deferred tax liabilities 13 15,455 6,804 5,038

Total liabilities 5,295,482 3,980,223 2,622,871

EQUITY

Share capital 25 971,011 763,917 565,130

Retained earnings 26 72,404 38,887 18,136
Legal reserve 27 104,884 65,165 40,217
Regulatory risk reserve 28 31,305 21,468 14,114
Special reserve 29 9,245 5,923 3,016
Other reserves 24 (1,957) 91 -

Total equity 1,186,892 895,450 640,613

Total equity and liabilities 6,482,374 4,875,673 3,263,484

28 to 91
The notes on pages 10 73 are an integral part of these financial statements.

The financial statements on pages 24

6 to 27
9 were approved and authorised for issue by the board of directors on October 24
2018 and were signed on its behalf by:

Hanna Tilahun Wondwossen Teshome

Board Chairperson President
Date: Date:
26 ANNUAL REPORT 2017/18

Enat Bank
Enat Bank Share
Share Company
Company
IFRS Financial
IFRS financial Statements
statements
For
For the Period
the period Ended
ended 30 June30 June 2018
2018
Statement
Statement ofof changes
changes in equity
in equity

Share Retained Other Legal Regulator Special Total

capital earnings reserves reserve y risk reserve reserve
Notes Birr'000 Birr'000 Birr'000 Birr'000 Birr'000 Birr'000 Birr'000

As at 1 July 2016 565,130 18,136 - 40,217 14,114 3,016 640,613

-
Profit for the period 26 - 112,203 - - - 112,203
Other comprehensive income: -
Re-measurement gains on defined 91 91
benefit plans (net of tax)
Transaction with owners in their capacity as owners : -
Contribution of equity net of transaction costs 198,787 198,787
Dividend provided for (56,243) (56,243)
-
Transfer to legal reserve 27 (24,948) 24,948 -
Transfer to regulatory risk reserve 28 (7,354) 7,354 -
Transfer to special reserve 29 (2,907) 2,907 -

Total comprehensive income 198,787 20,751 91 24,948 7,354 2,907 254,838

for the period

As at 30 June 2017 763,917 38,887 91 65,165 21,468 5,923 895,451

As at 1 July 2017 763,917 38,887 91 65,165 21,468 5,923 895,451

Profit for the period 26 158,875 158,875

Other comprehensive income: -
Re-measurement gains on defined (2,048) (2,048)
benefit plans (net of tax)
Transaction with owners in their -
capacity as owners
Contribution of equity net of 207,094 207,094
transaction costs
Dividend paid for (71,380) (71,380)
Transfer to legal reserve 27 (39,719) 39,719 -
Transfer to regulatory risk reserve 28 (9,837) 9,837 -
Transfer to special reserve 29 (3,322) 3,322 -
Directors share from the profit (1,100) (1,100)
-

Total comprehensive income 207,094 33,517 (2,048) 39,719 9,837 3,322 291,441
for the period

As at 30 June 2018 971,011 72,404 (1,957) 104,884 31,306 9,245 1,186,892

The notes on pages 28

10 to 91
73 are an integral part of these financial statements.
 ANNUAL REPORT 2017/18 27

Enat Bank Share

Enat Bank ShareCompany
Company
IFRS financial statements
IFRS Financial Statements
For the period ended
For the Period Ended 30 30 June
June2018
2018
Statement
Statement ofofcash
cashflflows
ows

30 June 2018 30 June

Notes Birr'000 Birr'000

Cash flows from operating activities

Cash generated from operations 30 568,695 637,904
Witholding tax paid (1) (2)
Income tax paid (27,228) (20,565)

Net cash (outflow)/inflow from operating activities 541,465 617,337

Cash flows from investing activities

Purchase of investment securities 17 (408,394) (424,157)
Purchase of Equity Investments (632) -
Purchase of intangible assets 19 - (5,157)
Purchase of property, plant and equipment 20 (46,173) (29,477)
Acquired Assets (8,725) -
Proceeds from sale of property, plant and equipment 30 - 12
Proceed on disposal of asset held for sale 21 - -

Net cash (outflow)/inflow from investing activities (463,924) (458,779)

Cash flows from financing activities

Proceeds from issues of shares 25 207,094 198,787
Dividend paid (71,381) (55,360)
Directors profit share paid (1,100) (1,017)

Net cash (outflow)/inflow from financing activities 134,613 142,410

Net increase/(decrease) in cash and cash equivalents 212,157 300,970

Cash and cash equivalents at the beginning of the year 14 1,085,418 767,434
Foreign exchange (losses)/ gains on cash and cash
equivalents 10,142 17,014
Cash and cash equivalents at the end of the year 14 1,307,717 1,085,418

The notes on pages 10

28 to 73
91 are an integral part of these financial statements.
28 ANNUAL REPORT 2017/18

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

1 General information

Enat Bank SC (" the Bank") is a private commercial Bank domiciled in Ethiopia. The Bank became operational on
5 March 2013 in accordance with the provisions of the Commercial code of Ethiopia of 1960 and the Licensing and
Supervision of Banking Business Proclamation No. 84/1994. The Bank registered office is at:

Enat Bank Share Company

Kirkos sub-city,Woreda 08,Around Bambiss Bridge
P O Box 18401
Addis Ababa, Ethiopia

The bank is involved in provision of banking services for all, with a special focus of faciltating greater access to and
use of financial services for women, and creating values for shareholders. The bank's inclusive business model
initiative involves women entrepreneurs in order to expand economic opportunities while creating value for Ethiopia’s
businesses, and society in general.

2 Summary of significant accounting policies

2.1 Introduction to summary of significant accounting policies

The principal accounting policies applied in the preparation of these financial statements are set out below. These

2.2 Basis of preparation

The financial statements for the period ended 30 June 2018 have been prepared in accordance with International
Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").
Additional information required by National regulations is included where appropriate.

The financial statements comprise the statement of profit or loss and other comprehensive income, the statement of
financial position, the statement of changes in equity, the statement of cash flows and the notes to the financial
statements.

The financial statements for the period ended 30 June 2018 are the first the Bank has prepared in accordance with
IFRS. Refer to note 39 for information on how the Bank adopted IFRS.

The financial statements have been prepared in accordance with the going concern principle under the historical cost

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting
estimates. It also requires management to exercise its judgment in the process of applying the Bank’s accounting
policies. Changes in assumptions may have a significant impact on the financial statements in the period the
assumptions changed. Management believes that the underlying assumptions are appropriate and that the Bank's
financial statements therefore present the financial position and results fairly. The areas involving a higher degree of
judgment or complexity, or areas where assumptions and estimates are significant to the financial statements, are
disclosed in Note 4.
 ANNUAL REPORT 2017/18 29

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

2.2.1 Going concern

The financial statements have been prepared on a going concern basis. The management have no doubt that the Bank
would remain in existence after 12 months.

2.2.2 Changes in accounting policies and disclosures

New Standards, amendments, interpretations issued but not yet effective.

A number of new standards and amendments to standards and interpretations are effective for annual periods
beginning after 30 June 2018, and have not been applied in preparing these financial statements. None of these is
expected to have a significant effect on the financial statements of the Bank, except the following set out below:

IFRS 9 - Financial Instruments

IFRS 9, published in July 2014, replaces the existing guidance in IAS 39 Financial Instruments: Recognition and
Measurement. IFRS 9 includes revised guidance on the classification and measurement of financial instruments,
including a new expected credit loss model for calculating impairment on financial assets, and the new general hedge
accounting requirements. It also carries forward the guidance on recognition and derecognition of financial
instruments from IAS 39. IFRS 9 is effective for annual reporting periods beginning on or after 1 January 2018, with
early adoption permitted.
(a) Classification and measurement

IFRS 9 require all financial assets, except equity instruments and derivatives, to be assessed based on a combination of
the entity’s business model for managing the assets and the instruments’ contractual cash flow characteristics. The IAS
39 measurement categories will be replaced by: fair value through profit or loss (FVPL), fair value through other
comprehensive income (FVOCI), and amortised cost. IFRS 9 will also allow entities to continue to irrevocably
designate instruments that qualify for amortised cost or fair value through OCI instruments as FVPL, if doing so
eliminates or significantly reduces a measurement or recognition inconsistency. Equity instruments that are not held
for trading may be irrevocably designated as FVOCI, with no subsequent reclassification of gains or losses to the
income statement. The accounting for financial liabilities will largely be the same as the requirements of IAS 39, except
for the treatment of gains or losses arising from an entity’s own credit risk relating to liabilities designated at FVPL.
Such movements will be presented in OCI with no subsequent reclassification to the income statement, unless an
accounting mismatch in profit or loss would arise.

Having completed its initial assessment, the Bank has concluded that loans and advances to customers, treasury bills
and other financial assets that are classified as loans and receivables under IAS 39 are expected to be measured at
amortised cost under IFRS 9 and equity investments will be classified as FVOCI.

(b) Impairment of financial assets

IFRS 9 will also fundamentally change the loan loss impairment methodology. The standard will replace IAS 39’s
incurred loss approach with a forward-looking expected loss (ECL) approach. The Bank will be required to record an
allowance for expected losses for all loans and other debt financial assets not held at FVPL, together with loan
commitments and financial guarantee contracts. The allowance is based on the expected credit losses associated with
the probability of default in the next twelve months unless there has been a significant increase in credit risk since
origination, in which case, the allowance is based on the probability of default over the life of the asset.

The Bank will establish a policy to perform an assessment at the end of each reporting period of whether credit risk
has increased significantly since initial recognition by considering the change in the risk of default occurring over the
remaining life of the financial instrument.
To calculate ECL, the Bank will estimates the risk of a default occurring on the financial instrument during its expected
life. ECLs are estimated based on the present value of all cash shortfalls over the remaining expected life of the
financial asset, i.e., the difference between: the contractual cash flows that are due to the Bank under the contract, and
the cash flows that the Bank expects to receive, discounted at the effective interest rate of the loan.
In comparison to IAS 39, the Bank expects the impairment charge under IFRS 9 to be more volatile than under IAS 39
and to result in an increase in the total level of current impairment allowances. Under IFRS 9, the Bank will group its
loans into Stage 1, Stage 2 and Stage 3, based on the applied impairment methodology, as described below:
30 ANNUAL REPORT 2017/18

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

· Stage 1 – Performing loans: when loans are first recognised, the Bank recognises an allowance based on 12-month
expected credit losses.
· Stage 2 – Underperforming loans: when a loan shows a significant increase in credit risk, the Bank records an
allowance for the lifetime expected credit loss.
· Stage 3 – Impaired loans: the Bank recognises the lifetime expected credit losses for these loans. In addition, in
Stage 3 the Bank accrues interest income on the amortised cost of the loan net of allowances.
When estimating lifetime ECLs for undrawn loan commitments, the Bank will:

· Estimate the expected portion of the loan commitment that will be drawn down over the expected life of the loan
commitment and;
· Calculate the present value of cash shortfalls between the contractual cash flows that are due to the entity if the holder
of the loan commitment draws down that expected portion of the loan and the cash flows that the entity expects to
receive if that expected portion of the loan is drawn down.
For financial guarantee contracts, the Bank will estimate the lifetime ECLs based on the present value of the expected
payments to reimburse the holder for a credit loss that it incurs less any amounts that the guarantor expects to receive
from the holder, the debtor or any other party. If a loan is fully guaranteed, the ECL estimate for the financial
guarantee contract would be the same as the estimated cash shortfall estimate for the loan subject to the guarantee.

For revolving facilities such as credit cards and overdrafts, the Bank measures ECLs by determining the period over
which it expects to be exposed to credit risk, taking into account the credit risk management actions that it expects to
take once the credit risk has increased and that serve to mitigate losses.

The Bank will incorporate forward-looking information in both the assessment of significant increase in credit risk
and the measurement of ECLs.

The Bank will considers forward-looking information such as macroeconomic factors (e.g., unemployment, GDP
growth, interest rates, etc.) and economic forecasts.

(c) Hedge accounting

IFRS 9 allows entities to continue with the hedge accounting under IAS 39 even when other elements of IFRS 9
become mandatory on 1 January 2018. The new hedging rules are, however, not expected to impact the Bank.

IFRS 15 - Revenue from contracts with customers

IFRS 15 was issued in May 2014 and establishes a five-step model to account for revenue arising from contracts with
customers. Under IFRS 15, revenue is recognised at an amount that reflects the consideration to which an entity
expects to be entitled in exchange for transferring goods or services to a customer.

This standard deals with revenue recognition and establishes principles for reporting useful information to users of
financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an
entity’s contracts with customers. Revenue is recognised when a customer obtains control of a good or service and
thus has the ability to direct the use and obtain the benefits from the good or service.

The standard replaces IAS 18 ‘Revenue’ and IAS 11 ‘Construction contracts’ and related interpretations. The standard
is effective for annual periods beginning on or after 1 January 2018 and earlier application is permitted. The Bank is
yet to fully assess the expected impact on this standard.
 ANNUAL REPORT 2017/18 31

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

IFRS 16 - Leases
This standard was issued in January 2016 (Effective 1 January 2019) . It sets out the principles for the recognition,
measurement, presentation and disclosure of leases. The objective is to ensure that lessees and lessors provide
relevant information in a manner that faithfully represents those transactions. The standard introduces a single lessee
accounting model and requires a lessee to recognise assets and liabilities for all leases with a term of more than 12
months, unless the underlying asset is of low value. A lessee is required to recognise a right-of-use asset representing
its right to use the underlying leased asset and a lease liability representing its obligation to make lease payments. it
also substantially carries forward the lessor accounting requirements in IAS 17. The Bank is yet to fully assess the
expected impact of this standard.

IFRIC Interpretation 22 - Foreign Currency Transactions and Advance Consideration

The interpretation clarifies that in determining the spot exchange rate to use on initial recognition of the related asset,
expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to
advance consideration, the date of the transaction is the date on which an entity initially recognises the nonmonetary
asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in
advance, then the entity must determine a date of the transactions for each payment or receipt of advance
consideration.

Entities may apply the amendments on a fully retrospective basis. Alternatively, an entity may apply the interpretation
prospectively to all assets, expenses and income in its scope that are initially recognised on or after:
(i) The beginning of the reporting period in which the entity first applies the interpretation or;
(ii) The beginning of a prior reporting period presented as comparative information in the financial statements of the
reporting period in which the entity first applies the interpretation. The effective date for the amendment is 1 January
2018.

2.3 Foreign currency translation

a) Functional and presentation currency

Items included in the financial statements are measured using the currency of the primary economic environment in
which the Bank operates ('the functional currency'). The functional currency and presentation currency of the Bank is
the Ethiopian Birr (Birr).

b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the
dates of the transactions. Foreign exchange gains and losses resulting from the settlement of foreign currency
transactions and from the translation at exchange rates of monetary assets and liabilities denominated in currencies
other than the Bank's functional currency are recognised in profit or loss within other (loss)/income. Monetary items
denominated in foreign currency are translated using the closing rate as at the reporting date.

Changes in the fair value of monetary securities denominated in foreign currency classified as available for sale are
analysed between translation differences resulting from changes in the amortised cost of the security and other
changes in the carrying amount of the security. Translation differences related to changes in amortised cost are
recognised in profit or loss, and other changes in carrying amount are recognised in other comprehensive income.

Translation differences on non-monetary financial assets and liabilities such as equities held at fair value through
profit or loss are recognised in profit or loss as part of the fair value gain or loss. Translation differences on non-
monetary financial assets measure at fair value, such as equities classified as available for sale, are included in other
comprehensive income.
32 ANNUAL REPORT 2017/18

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

2.4 Recognition of income and expenses

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Bank and the revenue
can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the
consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes
or duty.

The Bank, earns income from interest on loans given for domestic trade and services, building and construction,
manufacturing, agriculture and personal loans. Other incomes includes margins on letter of credits and performance
gaurantees.

2.5.1 Interest and similar income and expense

For all financial instruments measured at amortised cost and interest bearing financial assets classified as available–
for–sale interest income or expense is recorded using the Effective Interest rate (EIR), which is the rate that exactly
discounts estimated future cash payments or receipts through the expected life of the financial instrument or a shorter
period, where appropriate, to the net carrying amount of the financial asset or financial liability. The calculation takes
into account all contractual terms of the financial instrument (for example, prepayment options) and includes any fees
or incremental costs that are directly attributable to the instrument and are an integral part of the Effective Interest
Rate (EIR), but not future credit losses.

The carrying amount of the financial asset or financial liability is adjusted if the Bank revises its estimates of payments
or receipts. The adjusted carrying amount is calculated based on the original EIR and the change in carrying amount is
recorded as 'Interest and similar income' for financial assets and Interest and similar expense for financial liabilities.

Once the recorded value of a financial asset or a group of similar financial assets has been reduced due to an
impairment loss, interest income continues to be recognised using the rate of interest used to discount the future cash
flows for the purpose of measuring the impairment loss.

2.5.2 Fees and commission

Fees and commission income and expenses that are integral to the effective interest rate on a financial asset or liability
are included in the measurement of the effective interest rate. Other fees and commission income such as
correspondent charges and estimation fees, are recognised as the related services are performed.

When a loan commitment is not expected to result in the draw-down of a loan, loan commitment fees are recognised
on a straight-line basis over the commitment period.

Other fees and commission expenses relates mainly to transaction and service fees are expensed as the services are
received.

2.5.3 Dividend income

This is recognised when the Bank’s right to receive the payment is established, which is generally when the
shareholders approve and declare the dividend.
 ANNUAL REPORT 2017/18 33

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

2.5.4 Foreign exchange revaluation gains or losses

These are gains and losses arising on settlement and translation of monetary assets and liabilities denominated in
foreign currencies at the functional currency’s spot rate of exchange at the reporting date. This amount is recognised
in the income statement and it is further broken down into realised and unrealised portion.

The monetary assets and liabilities include financial assets within the cash and bank balances, foreign currencies
deposits received and held on behalf of third parties .

2.6 Financial instruments - initial recognition and subsequent measurement

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity.

2.6.1 Financial assets

Initial recognition and measurement
All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value
through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales
of financial assets that require delivery of assets within a time frame established by regulation or convention in the
market place (regular way trades) are recognised on the trade date, i.e., the date that the Bank commits to purchase or
sell the asset.

Subsequent measurement
For purposes of subsequent measurement, financial assets are classified into four categories:
• Loans and receivables
• Available-for-sale financial investments
• Fair value through profit and loss
• Held to maturity

a) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in
an active market. After initial measurement, such financial assets are subsequently measured at amortised cost using
the effective interest rate (EIR) method, less impairment. Amortised cost is calculated by taking into account any
discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is
included in interest and similar income in income statement. The losses arising from impairment are recognised in
income statement in loan impairment charge.

The Bank’s loans and receivables comprise of loans and advances to customers, investment security and other
financial assets.

b) Available-for-sale (AFS)

AFS investments include equity . Equity investments classified as AFS are those which are neither classified as
held–for–trading nor designated at fair value through profit or loss.

After initial measurement, AFS financial investments are subsequently measured at fair value with unrealised gains or
losses recognised in OCI and credited in the AFS reserve until the investment is derecognised, at which time the
cumulative gain or loss is recognised in other operating income, or the investment is determined to be impaired, when
the cumulative loss is reclassified from the AFS reserve to income statement in impairment loss on financial
investment. Unquoted equity securities whose fair value cannot be reliably measured are carried at cost less
impairment.
'Day 1' profit or loss
When the transaction price differs from the fair value of other observable current market transactions in the same
instrument or based on a valuation technique whose variables include only data from observable markets, the Bank
immediately recognises the difference between the transaction price and fair value (a ‘Day 1’ profit or loss) in ‘Other
operating income’. In cases where fair value is determined using data which is not observable, the difference between
the transaction price and model value is only recognised in the profit or loss when the inputs become observable, or
when the instrument is derecognised.
34 ANNUAL REPORT 2017/18

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements
Derecognition of financial assets
A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is
primarily derecognised (i.e. removed from the Bank’s statement of financial position) when:

• the rights to receive cash flows from the asset have expired, or
• the Bank has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the
received cash flows in full without material delay to a third party under a ‘pass–through’ arrangement; and either

(a) the Bank has transferred substantially all the risks and rewards of the asset, or
(b) the Bank has neither transferred nor retained substantially all the risks and rewards of the asset, but has
transferred control of the asset.

When the Bank has transferred its rights to receive cash flows from an asset or has entered into a pass-through
arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither
transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the
Bank continues to recognise the transferred asset to the extent of the Bank’s continuing involvement. In that case, the
Bank also recognises an associated liability. The transferred asset and the associated liability are measured on a basis
that reflects the rights and obligations that the Bank has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the
original carrying amount of the asset and the maximum amount of consideration that the Bank could be required to
repay.

Impairment of financial assets

The Bank assesses at each reporting date, whether there is any objective evidence that a financial asset or a group of
financial assets is impaired. An impairment exists if one or more events that has occurred since the initial recognition
of the asset (an incurred ‘loss event’), has an impact on the estimated future cash flows of the financial asset or the
group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the
borrower or a group of borrowers is experiencing significant financial difficulty, the probability that they will enter
Bankruptcy or other financial reorganisation, default or delinquency in interest or principal payments and where
observable data indicates that there is measurable decrease in the estimated future cash flows, such as changes in
arrears or economic conditions that correlate with defaults.

(i) Financial assets carried at amortised cost

For financial assets carried at amortised cost (such as loans and receivables), the Bank first assesses individually
whether objective evidence of impairment exists for financial assets that are individually significant, or collectively for
financial assets that are not individually significant. If the Bank determines that no objective evidence of impairment
exists for an individually assessed financial asset, it includes the asset in a group of financial assets with similar credit
risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment
and for which an impairment loss is, or continues to be, recognised are not included in a collective assessment of
impairment.

If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the
difference between the asset's carrying amount and the present value of estimated future cash flows (excluding future
expected credit losses that have not yet been incurred). The carrying amount of the asset is reduced through the use of
an allowance account and the amount of the loss is recognised in income statement. Interest income continues to be
accrued on the reduced carrying amount and is accrued using the rate of interest used to discount the future cash flows
for the purpose of measuring the impairment loss.

The interest income is recorded as part of ‘Interest and similar income’. Loans together with the associated allowance
are written off when there is no realistic prospect of future recovery and all collateral has been realised or has been
transferred to the Bank. If, in a subsequent year, the amount of the estimated impairment loss increases or decreases
because of an event occurring after the impairment was recognised, the previously recognised impairment loss is
increased or reduced by adjusting the allowance account. If a future write–off is later recovered, the recovery is
credited to the ’loan impairment charge’.

The calculation of the present value of the estimated future cash flows of a collateralised financial asset reflects the
cash flows that may result from foreclosure less costs for obtaining and selling the collateral, whether or not
foreclosure is probable.
 ANNUAL REPORT 2017/18 35

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

For the purpose of a collective evaluation of impairment, financial assets are grouped on the basis of the Bank’s
internal credit grading system, that considers credit risk characteristics such as asset type, industry, geographical
location, collateral type, past–due status and other relevant factors.

Future cash flows on a group of financial assets that are collectively evaluated for impairment are estimated on the
basis of historical loss experience for assets with credit risk characteristics similar to those in the Bank.

Historical loss experience is adjusted on the basis of current observable data to reflect the effects of current conditions
on which the historical loss experience is based and to remove the effects of conditions in the historical period that do
not exist currently. Estimates of changes in future cash flows reflect, and are directionally consistent with, changes in
related observable data from year to year (such as changes in unemployment rates, property prices, commodity prices,
payment status, or other factors that are indicative of incurred losses in the Bank and their magnitude). The
methodology and assumptions used for estimating future cash flows are reviewed regularly to reduce any differences
between loss estimates and actual loss experience.

(ii) Available-for-sale (AFS) financial instruments

Available-for-sale financial assets are impaired if there is objective evidence of impairment, resulting from one or
more loss events that occurred after initial recognition but before the reporting date, that have an impact on the future
cash flows of the asset. In addition, an available-for-sale equity instrument is generally considered impaired if a
significant or prolonged decline in the fair value of the instrument below its cost has occurred. Where an available-for-
sale asset, which has been remeasured to fair value directly through equity, is impaired, the impairment loss is
recognised in profit or loss. If any loss on the financial asset was previously recognised directly in equity as a reduction
in fair value, the cumulative net loss that had been recognised in equity is transferred to profit or loss and is
recognised as part of the impairment loss. The amount of the loss recognised in profit or loss is the difference between
the acquisition cost and the current fair value, less any previously recognised impairment loss.

If, in a subsequent period, the amount relating to an impairment loss decreases and the decrease can be linked
objectively to an event occurring after the impairment loss was recognised, where the instrument is a debt instrument,
the impairment loss is reversed through profit or loss. An impairment loss in respect of an equity instrument classified
as available-for-sale is not reversed through profit or loss but accounted for directly in equity.

Renegotiated loans
Where possible, the Bank seeks to restructure loans rather than to take possession of collateral. This may involve
extending the payment arrangements and the agreement of new loan conditions. Once the terms have been
renegotiated any impairment is measured using the original EIR as calculated before the modification of terms and the
loan is no longer considered past due. Management continually reviews renegotiated loans to ensure that all criteria
are met and that future payments are likely to occur. The loans continue to be subject to an individual or collective
impairment assessment, calculated using the loan’s original EIR.

Collateral valuation

The Bank seeks to use collateral, where possible, to mitigate its risks on financial assets. The collateral comes in
various forms such as cash via Bank guarantees and real estate. The fair value of collateral is generally assessed, at a
minimum, at inception and based on the Bank's reporting schedule.
36 ANNUAL REPORT 2017/18

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements
Collateral repossessed
Repossessed collateral represents financial and non-financial assets acquired by the Bank in settlement of overdue
loans. The Bank’s policy is to determine whether a repossessed asset is best used for its internal operations or should
be sold. Assets determined to be used for internal operations are initially recognised at the lower of their repossessed
value or the carrying value of the original secured asset and included in the relevant assets depending on the nature
and the Bank’s intention in respect of recovery of these assets, and are subsequently remeasured and accounted for in
accordance with the accounting policies for these categories of assets. Assets that are determined better to be sold are
immediately transferred to assets held for sale at the lower of their fair value and the carrying value of the secured
asset at the repossession date in line with the Bank’s policy. Where the fair value is lower than the carrying value of the
secured asset (the loan), the difference is recognised as a loss in profit or loss immediately.

2.6.2 Financial liabilities

Initial recognition and measurement

Financial liabilities are classified at initial recognition, as financial liabilities at fair value through profit or loss and
other financial liabilities.

All financial liabilities are recognised initially at fair value and, in the case of other financial liabilities, net of directly
attributable transaction costs.

The Bank's financial liabilities include deposits for imports , payables to withdrawing shareholders, exchange
commission payables among others .

Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

Financial liabilities at amortised cost

Financial instruments issued by the Bank, that are not designated at fair value through profit or loss but are classified
as financial liabilities at amortised cost, where the substance of the contractual arrangement results in the Bank having
an obligation either to deliver cash or another financial asset to the holder, or to satisfy the obligation other than by
the exchange of a fixed amount of cash or another financial asset for a fixed number of own equity shares.

After initial measurement, financial liabilities at amortised cost are subsequently measured at amortised cost using the
effective interest rate (EIR). Amortised cost is calculated by taking into account any discount or premium on the issue
and costs that are an integral part of the EIR.

The Bank’s financial liabilities carried at amortised cost comprise of customer deposits, margin held on letter of credit,
and long term deposits

Financial assets are derecognised when the contractual rights to receive the cash flows from these assets have ceased
to exist or the assets have been transferred and substantially all the risks and rewards of ownership of the assets are
also transferred (that is, if substantially all the risks and rewards have not been transferred, the Bank tests control to
ensure that continuing involvement on the basis of any retained powers of control does not prevent derecognition).

Financial liabilities are derecognised when they have been redeemed or otherwise extinguished.
 ANNUAL REPORT 2017/18 37

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

2.6.3 Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the statement of financial position where The
Bank has a legally enforceable right to offset the recognised amounts, and there is an intention to settle on a net basis
or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on
future events and must be enforceable in the normal course of business and in the event of default, insolvency or
bankruptcy of the Bank or the counterparty.

2.7 Cash and cash equivalents

Cash and cash equivalents comprise balances with less than three months’ maturity from the date of acquisition,
including cash in hand, deposits held at call with Banks and other short-term highly liquid investments with original
maturities of three months or less.

For the purposes of the cash flow statement, cash and cash equivalents include cash and restricted balances with
National Bank of Ethiopia.

2.8 Property, plant and Equipment

Property, plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses,
if any. Such cost includes the cost of replacing part of the property, plant and equipment if the recognition criteria are
met. When significant parts of property, plant and equipment are required to be replaced at intervals, the Bank
recognises such parts as individual assets with specific useful lives and depreciates them accordingly. All other repair
and maintenance costs are recognised in income statement as incurred.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the group and the cost of the
item can be measured reliably. The carrying amount of the replaced part is derecognised.

Depreciation is calculated using the straight-line method to allocate their cost to their residual values over their
estimated useful lives, as follows:

Asset category Years Residual values

Buildings 50 5% of cost
furniture and fittings
Short-lived 5 1% of Cost
Medium -lived 10 1% of Cost
Computer equipment 7 1% of Cost
Motor vehicles 10 5% of cost
Other office equiment
Short-lived 5 1% of Cost
Medium -lived 10 1% of Cost
Long-lived 20 1% of Cost

The Bank commences depreciation when the asset is available for use.

Capital work-in-progress is not depreciated as these assets are not yet available for use. They are disclosed when
reclassified during the year.

An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal
or when no future economic benefits are expected from its use disposal. Any gain or loss arising on derecognition of
the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is
included in income statement when the asset is derecognised.

The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each
financial year end and adjusted prospectively, if appropriate.
38 ANNUAL REPORT 2017/18

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

2.9 Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition,
intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses, if any.
Internally generated intangibles, excluding capitalised development costs, are not capitalised and the related
expenditure is reflected in income statement in the period in which the expenditure is incurred .

The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are
amortised over the useful economic life. The amortisation period and the amortisation method for an intangible asset
with a finite useful life are reviewed at least at each financial year-end. Changes in the expected useful life, or the
expected pattern of consumption of future economic benefits embodied in the asset, are accounted for by changing the
amortisation period or methodology, as appropriate, which are then treated as changes in accounting estimates. The
amortisation expenses on intangible assets with finite lives is presented as a separate line item in the income
statement.

Amortisation is calculated using the straight–line method as below

Description Years Residual value
Software 6 Nil

2.10 Non-current assets (or disposal groups) held for sale and discontinued operations

Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered
principally through a sale transaction rather than through continuing use and a sale is considered highly probable.
They are measured at the lower of their carrying amount and fair value less costs to sell, except for assets such as
deferred tax assets, assets arising from employee benefits, financial assets and investment property that are carried at
fair value and contractual rights under insurance contracts, which are specifically exempt from this requirement.

An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal group) to fair value
less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset (or disposal
group), but not in excess of any cumulative impairment loss previously recognised. A gain or loss not previously
recognised by the date of the sale of the non-current asset (or disposal group) is recognised at the date of
derecognition.

Non-current assets (including those that are part of a disposal group) are not depreciated or amortised while they are
classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified as
held for sale continue to be recognised.

Non-current assets classified as held for sale and the assets of a disposal group classified as held for sale are presented
separately from the other assets in the balance sheet. The liabilities of a disposal group classified as held for sale are
presented separately from other liabilities in the balance sheet.

A discontinued operation is a component of the entity that has been disposed of or is classified as held for sale and that
represents a separate major line of business or geographical area of operations, is part of a single co-ordinated plan to
dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resale.
The results of discontinued operations are presented separately in the statement of profit or loss.
 ANNUAL REPORT 2017/18 39

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

2.11 Impairment of non-financial assets

The Bank assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any
indication exists, or when annual impairment testing for an asset is required, the Bank estimates the asset’s
recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (CGU) fair
value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset, unless the
asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When
the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is
written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the asset. In
determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions
can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples,

The Bank bases its impairment calculation on detailed budgets and forecast calculations, which are prepared
separately for each of the Bank’s CGUs to which the individual assets are allocated. These budgets and forecast
calculations generally cover a period of five years. For longer periods, a long-term growth rate is calculated and
applied to project future cash flows after the fifth year.

For assets excluding goodwill, an assessment is made at each reporting date to determine whether there is an
indication that previously recognised impairment losses no longer exist or have decreased. If such indication exists,
the Bank estimates the asset’s or CGU’s recoverable amount. A previously recognised impairment loss is reversed only
if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last
impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its
recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no
impairment loss been recognised for the asset in prior years. Such reversal is recognised in the income statement.

2.12 Other assets

Other assets are generally defined as claims held against other entities for the future receipt of money. The other assets
in the Bank's financial statements include the following:

(a) Prepayment

Prepayments are payments made in advance for services to be enjoyed in future. The amount is initially capitalized in
the reporting period in which the payment is made and subsequently amortised over the period in which the service is
to be enjoyed.

(b) Other receivables

Other receivables are recognised upon the occurrence of event or transaction as they arise and cancelled when
payment is received.

The Bank's other receivables are rent receivables and other receivables from debtors.
40 ANNUAL REPORT 2017/18

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

2.13 Fair value measurement

The Bank measures financial instruments classified as available-for-sale at fair value at each statement of financial
position date. Fair value related disclosures for financial instruments and non-financial assets that are measured at
fair value or where fair values are disclosed are, summarised in the following notes:

• Disclosures for valuation methods, significant estimates and assumptions Notes 3 and Note 4.7.1
• Quantitative disclosures of fair value measurement hierarchy Note 4.7.2

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The fair value measurement is based on the presumption that
the transaction to sell the asset or transfer the liability takes place either:

• In the principal market for the asset or liability, or

• In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible to by the Bank.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when
pricing the asset or liability, assuming that market participants act in their economic best interest.

The Bank uses valuation techniques that are appropriate in the circumstances and for which sufficient data are
available to measure fair value, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within
the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value
measurement as a whole:
• Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
• Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is
directly or indirectly observable.
• Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable.

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Bank determines
whether transfers have occurred between Levels in the hierarchy by re-assessing categorisation (based on the lowest
level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

The Bank’s management determines the policies and procedures for both recurring fair value measurement, such as
available-for-sale financial assets.
 ANNUAL REPORT 2017/18 41

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

2.14 Employee benefits

The Bank operates various post-employment schemes, including both defined benefit and defined contribution
pension plans and post employment benefits.

(a) Defined contribution plan

The Bank operates two defined contribution plans;

i) pension scheme in line with the provisions of Ethiopian pension of private organisation employees proclamation
715/2011. Funding under the scheme is 7% and 11% by employees and the Bank respectively;
ii) provident fund contribution, funding under this scheme is 2% by only the Bank ;

Both schemes are based on the employees' salary. Employer's contributions to this scheme are charged to profit or loss
and other comprehensive income in the period in which they relate.

(b) Defined benefit plan

The liability or asset recognised in the balance sheet in respect of defined benefit pension plans is the present value of
the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit
obligation is calculated annually by independent actuaries using the projected unit credit method.

The liability recognised in the statement of financial position in respect of defined benefit pension plans is the present
value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets.

The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows
using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be
paid, and that have terms to maturity approximating to the terms of the related pension obligation.

The current service cost of the defined benefit plan, recognised in the income statement in employee benefit expense,
except where included in the cost of an asset, reflects the increase in the defined benefit obligation resulting from
employee service in the current year, benefit changes curtailments and settlements.

Past-service costs are recognised immediately in income.

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or
credited to equity in other comprehensive income in the period in which they arise.

(c ) Termination benefits

Termination benefits are payable to executive directors when employment is terminated by the Bank before the
normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The
Bank recognises termination benefits when it is demonstrably committed to either: terminating the employment of
current employees according to a detailed formal plan without possibility of withdrawal; or providing termination
benefits as a result of an offer made to encourage voluntary redundancy.

(d ) Profit-sharing and bonus plans

The Banks recognises a liability and an expense for bonuses and profit-sharing based on a formula that takes into
consideration the profit attributable to the company’s shareholders after certain adjustments. The Bank recognises a
provision where contractually obliged or where there is a past practice that has created a constructive obligation.
42 ANNUAL REPORT 2017/18

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

2.15 Provisions

Provisions are recognised when the bank has a present obligation (legal or constructive) as a result of a past event, it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a
reliable estimate can be made of the amount of the obligation. When the Bank expects some or all of a provision to be
reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only
when the reimbursement is virtually certain. The expense relating to a provision is presented in income statement net
of any reimbursement.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects,
when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the
passage of time is recognised as other operating expenses.

2.16 Share capital

Incremental costs directly attributable to the issue of new shares or options or to the acquisition of a business are
shown in equity as a deduction, net of tax, from the proceeds.

2.17 Legal reserve

The legal reserve which is a statutory reserve to which no less than 25% of the net profits after taxation shall be
transferred each year until such fund is equal to the capital. When the legal reserve equals the capital of the bank , the
amount to be transferred to the legal reserve account shall be 10% of the annual net profit.

2.18 Leases

The determination of whether an arrangement is a lease, or contains a lease, is based on the substance of the
arrangement and requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a
specific asset or assets or whether the arrangement conveys a right to use the asset.

Bank as a lessee

Leases that do not transfer to the Bank substantially all of the risks and benefits incidental to ownership of the leased
items are operating leases. Operating lease payments are recognised as an expense in the income statement on a
straight-line basis over the lease term. Contingent rental payable is recognised as an expense in the period in which
they it is incurred.

Bank as a lessor

Leases where the Bank does not transfer substantially all of the risk and benefits of ownership of the asset are
classified as operating leases. Rental income is recorded as earned based on the contractual terms of the lease in Other
operating income. Initial direct costs incurred in negotiating operating leases are added to the carrying amount of the
leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are recognised as
revenue in the period in which they are earned.
 ANNUAL REPORT 2017/18 43

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

2.19 Income taxation

(a) Current income tax

The income tax expense or credit for the period is the tax payable on the current period’s taxable income based on the
applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to
temporary differences and to unused tax losses.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of
the reporting period in Ethiopia. Management periodically evaluates positions taken in tax returns with respect to
situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate
on the basis of amounts expected to be paid to the tax authorities.

(b) Deferred tax

Deferred tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their
carrying amounts in the financial statements. However, deferred tax liabilities are not recognised if they arise from the
initial recognition of goodwill; deferred tax is not accounted for if it arises from initial recognition of an asset or
liability in a transaction other than a business combination that at the time of the transaction affects neither
accounting nor taxable profit or loss.

Deferred tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the balance
sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is
settled.

Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available
against which the temporary differences can be utilised.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against
current tax liabilities and when the deferred taxes assets and liabilities relate to income taxes levied by the same
taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the
balances on a net basis.

Deferred tax assets and liabilities are only offset when they arise in the same tax reporting group and where there is
both the legal right and the intention to settle on a net basis or to realise the asset and settle the liability
simultaneously.

3 Significant accounting judgements, estimates and assumptions

The preparation of the Bank’s financial statements requires management to make judgements, estimates and
assumptions that affect the reported amount of revenues, expenses, assets and liabilities, and the accompanying
disclosures, as well as the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates
could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in
future periods.

Other disclosures relating to the Bank’s exposure to risks and uncertainties includes:
• Capital management Note 4.6
• Financial risk management and policies Note 4.1
• Sensitivity analyses disclosures Note 4.5.2
44 ANNUAL REPORT 2017/18

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

3.1 Judgements

In the process of applying the Bank’s accounting policies, management has made the following judgements, which
have the most significant effect on the amounts recognised in the financial statements:

Operating lease commitments - Bank as lessee

The Bank has entered into commercial property leases. The Bank has determined, based on an evaluation of the terms
and conditions of the arrangements, such as the lease term not constituting a substantial portion of the economic life
of the commercial property, that it does not retain all the significant risks and rewards of ownership of these
properties and accounts for the contracts as operating leases.

3.2 Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation at the reporting date, that have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
financial year, are described below. The Bank based its assumptions and estimates on parameters available when the
financial statements were prepared. Existing circumstances and assumptions about future developments, however,
may change due to market changes or circumstances beyond the control of the Bank. Such changes are reflected in the
assumptions when they occur.

Impairment losses on loans and receivables

The Bank reviews its loan portfolios for impairment on an on-going basis. The Bank first assesses whether objective
evidence of impairment exists individually for financial assets that are individually significant, and individually or
collectively for financial assets that are not individually significant. Impairment provisions are also recognised for
losses not specifically identified but which, experience and observable data indicate, are present in the portfolio at the
date of assessment. For individually significant financial assets that has been deemed to be impaired, management has
deemed that cashflow from collateral obtained would arise within 24 months where the financial asset is collaterised.

Management uses estimates based on historical loss experience for assets with credit risk characteristics and objective
evidence of impairment similar to those in the portfolio, when scheduling its future cash flows. The methodology and
assumptions used for estimating both the amount and timing of future cash flows are reviewed regularly to reduce any
differences between loss estimates and actual loss experience.

The use of historical loss experience is supplemented with significant management judgment to assess whether
current economic and credit conditions are such that the actual level of inherent losses is likely to differ from that
suggested by historical experience. In normal circumstances, historical experience provides objective and relevant
information from which to assess inherent loss within each portfolio. In other circumstances, historical loss experience
provides less relevant information about the inherent loss in a given portfolio at the balance sheet date, for example,
where there have been changes in economic conditions such that the most recent trends in risk factors are not fully
reflected in the historical information. In these circumstances, such risk factors are taken into account when
calculating the appropriate levels of impairment allowances, by adjusting the impairment loss derived solely from
historical loss experience.

The detailed methodologies, areas of estimation and judgement applied in the calculation of the Bank's impairment
charge on financial assets are set out in the Financial risk management section.

The estimation of impairment losses is subject to uncertainty, which has increased in the current economic
environment, and is highly sensitive to factors such as the level of economic activity, unemployment rates, property
price trends, and interest rates. The assumptions underlying this judgement are highly subjective. The methodology
and the assumptions used in calculating impairment losses are reviewed regularly in the light of differences between
loss estimates and actual loss experience.
 ANNUAL REPORT 2017/18 45

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements
Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the statement of financial position cannot
be measured based on quoted prices in active markets, their fair value is measured using valuation techniques
including the discounted cash flow (DCF) model. The inputs to these models are taken from observable markets where
possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements
include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these
factors could affect the reported fair value of financial instruments. See Note 4.7 for further disclosures.

Depreciation and carrying value of property, plant and equipment

The estimation of the useful lives of assets is based on management’s judgement. Any material adjustment to the
estimated useful lives of items of property and equipment will have an impact on the carrying value of these items.

Impairment of non-financial assets

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is
the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is
based on available data from binding sales transactions, conducted at arm’s length, for similar assets or observable
market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model.
The cash flows are derived from the budget for the next five years and do not include restructuring activities that the
Bank is not yet committed to or significant future investments that will enhance the asset’s performance of the CGU
being tested. The recoverable amount is sensitive to the discount rate used for the discounted cash flow model as well
as the expected future cash-inflows and the growth rate used for extrapolation purposes.

In assessing whether there is any indication that an asset may be impaired, the Bank considers the following
indications:

(i) External information

•there are observable indications that the asset's value has declined during the period significantly more than would be
expected as a result of the passage of time or normal use.
•significant changes with an adverse effect on the Bank have taken place during the period, or will take place in the
near future, in the technological, market, economic or legal environment in which the Bank operates or in the market
to which an asset is dedicated.
•market interest rates or other market rates of return on investments have increased during the period, and those
increases are likely to affect the discount rate used in calculating an asset's value in use and decrease the asset's
recoverable amount materially.

(ii) Internal information

•evidence is available of obsolescence or physical damage of an asset.
•significant changes with an adverse effect on the Bank have taken place during the period, or are expected to take
place in the near future, in the extent to which, or manner in which, an asset is used or is expected to be used. These
changes include the asset becoming idle, plans to discontinue or restructure the operation to which an asset belongs,
plans to dispose of an asset before the previously expected date, and reassessing the useful life of an asset as finite
rather than indefinite.
•evidence is available from internal reporting that indicates that the economic performance of an asset is, or will be,
worse than expected.

Taxes

Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and the amount
and timing of future taxable income. Given the wide range of international business relationships and the long-term
nature and complexity of existing contractual agreements, differences arising between the actual results and the
assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and
expense already recorded. The amount of such provisions is based on various factors, such as experience of previous
tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority.

Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be
available against which the losses can be utilised. Significant management judgement is required to determine the
amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable
profits together with future tax planning strategies.
46 ANNUAL REPORT 2017/18

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

4 Financial risk management

4.1 Introduction

Risk is inherent in the Bank’s activities, but is managed through a process of ongoing identification, measurement and monitoring, subject
to risk limits and other controls. This process of risk management is critical to the Bank’s continuing profitability and each individual
within the Bank is accountable for the risk exposures relating to his or her responsibilities. The Bank is exposed to credit risk, liquidity
risk and market risk. It is also subject to country risk and various operating risks.

The independent risk control process does not include business risks such as changes in the environment, technology and industry. The
Bank's policy is to monitor those business risks through the Bank’s strategic planning process.

4.1.1 Risk management structure

The Board of Directors has overall responsibility for the establishment and oversight of the Bank’s risk management framework.

The Board has established the Loan Review and Risk sub-Committee, which are responsible for developing and monitoring Bank’s risk
management policies.

The Bank’s risk management policies are established to identify and analyze the risks faced by the Bank, to set appropriate risk limits and
controls, and to monitor risks and adherence to limits.

Risk management policies and systems are reviewed regularly to reflect changes in the regulation, market conditions, products and
services offered. The Bank, through its training and procedures and policies for management, aims to develop a constructive control
environment, in which all employees understand their roles and obligations.

The Bank’s Board of Directors is responsible for monitoring compliance with the Bank’s risk management policies and procedures, and
for reviewing the adequacy of the risk management framework in relation to the risks faced by the Bank. The Bank’s Board of Directors is
assisted in these functions by the Risk and Compliance Department.

The Risk and Compliance Department undertakes both regular and ad-hoc reviews of risk management controls and procedures, the
results of which are reported to the Risk sub Committee.

4.1.2 Risk measurement and reporting systems

The Bank’s risks are measured using a method that reflects both the expected loss likely to arise in normal circumstances and unexpected
losses, which are an estimate of the ultimate actual loss based on statistical models. The models make use of probabilities derived from
historical experience, adjusted to reflect the economic environment. The Bank also runs worst-case scenarios that would arise in the event
that extreme events which are unlikely to occur do, in fact, occur.

Monitoring and controlling risks is primarily performed based on limits established by the Bank. These limits reflect the business strategy
and market environment of the Bank as well as the level of risk that the Bank is willing to accept, with additional emphasis on selected
regions. In addition, the Bank’s policy is to measure and monitor the overall risk bearing capacity in relation to the aggregate risk
exposure across all risk types and activities.
 ANNUAL REPORT 2017/18 47

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

4.1.3 Risk mitigation

Risk controls and mitigants, identified and approved for the Bank, are documented for existing and new processes and systems.

The adequacy of these mitigants is tested on a periodic basis through administration of control self-assessment questionnaires, using an
operational risk management tool which requires risk owners to confirm the effectiveness of established controls. These are subsequently
audited as part of the review process.

4.2 Financial instruments by category

The Bank's financial assets are classified into the following measurement categories: available-for-sale and loans and receivables and the
financial liabilities are classified into other liabilities at amortised cost.

Financial instruments are classified in the statement of financial position in accordance with their legal form and substance.

The Bank's classification of its financial assets is summarised in the table below:

Available-For- Loans and

Notes Sale receivables Total
30 June 2018 Birr'000 Birr'000 Birr'000

Cash and balances with banks 14 1,307,716.84 1,307,716.84

Loans and receivables 15 3,313,950.83 3,313,950.83
Investment securities: -
- Available for sale 17 15902 15,902.00
- Loans and receivables 17 1,395,841.59 1,395,841.59
Other assets 18 312,342.98 312,342.98

Total financial assets 15,902.00 6,329,852.23 6,345,754.23

Available-For- Loans and

Notes Sale receivables Total
30 June 2017 Birr'000 Birr'000 Birr'000

Cash and balances with banks 14 1085418 1,085,418.00

Loans and receivables 15 2450484 2,450,484.00
Investment securities: -
- Available for sale 17 15270 15,270.00
- Loans and receivables 17 986816 986,816.00
Other assets 18 233253 233,253.00

Total financial assets 15,270.00 4,755,971.00 4,771,241.00

Available-For- Loans and

Notes Sale receivables Total
1 July 2016 Birr'000 Birr'000 Birr'000

Cash and balances with banks 14 767,434 767,434

Loans and receivables 15 1,620,487 1,620,487
Investment securities:
- Available for sale 17 15,270 15,270
- Loans and receivables 17 562,659 562,659
Other assets 18 209,935 209,935

Total financial assets 15,270.00 3,160,515 3,175,785

48 ANNUAL REPORT 2017/18

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

4.3 Credit risk

Credit risk is the probability that a counterparty of the Bank will not meet its obligations in accordance with agreed terms and conditions
which may lead to financial loss. The Bank is exposed to credit risk due to activities such as loans and advances, loan commitments arising
from lending activities, credit enhancement provided such as financial guarantees and letter of credit.

The Bank adopts a conservative approach to credit risk. Where appropriate, the Bank intervenes in the economy and provides guarantees
in the financial system to prevent systemic risk.

4.3.1 Management of credit risk

In measuring credit risk of loans and receivables to various counterparties, the Bank considers the character and capacity of the obligor to
pay or meet contractual obligations, current exposures to the counter party/obligor and its likely future developments, credit history of the
counterparty/obligor; and the likely recovery ratio in case of default obligations-value of collateral and other ways out. Our credit
exposure comprises wholesale and retail loans and receivables which are developed to reflect the needs of our customers. The Bank’s
policy is to lend principally on the basis of our customer’s repayment capacity through quantitative and qualitative evaluation. However
we ensure that our loans are backed by collateral to reflect the risk of the obligors and the nature of the facility.

In the estimation of credit risk, the Bank estimate the following parameters:

(a) Probability of Default

This is the probability that an obligor or counterparty will default over a given period, usually one year. This can be calculated on portfolio
by portfolio basis or collectively depending on availability of historical data.

(b) Loss Given Default

Loss Given Default is defined as the portion of the loan determined to be irrecoverable at the time of loan default (1 – recovery rate). Our
methods for estimating LGD includes both quantitative and qualitative factors.

(c) Exposure at Default

This represents the amount that is outstanding at the point of default. Its estimation includes the drawn amount and expected utilisation
of the undrawn commitment at default.

4.3.2 Impairment assessment

The Bank assesses its impairment for the purpose of IFRS reporting using a two-way approach which are Individual assessment and
portfolio assessment.

(a) Individual assessment

The Bank reviewed and revised existing impairment triggers for each loan asset portfolio to ensure that a trigger identifies a loss event as
early as possible, which would result in the earliest possible recognition of losses within the IFRS framework. The Bank then estimated the
impairment based on the shortfall between the present value of estimated future cash flows and the asset carrying amount.

(b) Collective assessment

Loans and receivables that are not specifically impaired are assessed under collective impairment. For the purpose of collective
impairment, financial assets are grouped on the basis of similar credit risk characteristics that are indicative of the debtors’ ability to pay
all amounts due according to contractual terms.
 ANNUAL REPORT 2017/18 49

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

(b) Collective assessment (Contd)

The Bank generally bases its analyses on historical experience. The collective assessment takes account of data from the loan portfolio
(such as historical losses on the portfolio, levels of arrears, credit utilisation, loan to collateral ratios and expected receipts and recoveries
once impaired) or economic data (such as current economic conditions, unemployment levels and local or industry–specific problems).
The approximate delay between the time a loss is likely to have been incurred and the time it will be identified as requiring an individually
assessed impairment allowance is also taken into consideration. The impairment allowance is reviewed by credit management to ensure

   

   

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alignment with the Bank’s overall policy.

4.3.3 Credit related commitments risks

The Bank holds collateral against loans and receivables to customers in the form of bank guarantees and property. Estimates of fair value
are based on the value of collateral assessed at the time of borrowing.

4.3.4 Maximum exposure to credit risk before collateral held or credit enhancements

(a) Types of credit exposure

The Bank's maximum exposure to credit risk at 30 June 2018, 30 June 2017 and 30 June 2016 respectively, is represented by the net
carrying amounts in the statement of financial position.

30 June 2018 30 June 2017 1 July 2016

Birr'000 Birr'000 Birr'000

Cash and balances with banks 1,307,717 1,085,418 767,434

Loans and receivables 3,313,951 2,450,484 1,620,487
Investment securities:
- Available for sale 15,902 15,270 15,270
- Loans and receivables 1,395,842 986,816 562,659
Other assets 312,343 233,253 209,935
6,345,754 4,771,241 3,175,785

Credit risk exposures relating to off balance sheets are as follows:

Letters of guarantee 2,122,436 1,285,140 1,145,811
Letters of credit 223,077 232,039 184,222
Loans approved not disbursed 211,801 99,665
Unutilized facilities 156,252 118,340 94,752
2,501,765 1,847,320 1,524,449

Total maximum 8,847,519 6,618,561 4,700,234

exposure

(b) Assets obtained by taking possession of collateral

Details of financial and non-financial assets obtained by the Bank during the year by taking possession of collaterals held as security
against loans and receivables at the year end are shown below.

30 June 2018 30 June 2017 1 July 2016

Birr'000 Birr'000 Birr'000

Properties 8,725 - -
Debt securities - -
Others - -

8,725 - -

The Bank's policy is to pursue timely realisation of the collateral in a timely manner.
50 ANNUAL REPORT 2017/18

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

(c) Loans and receivables at amortised cost

(i) Gross loans and receivables to customers per sector is analysed as follows:

30 June 2018 30 June 2017 1 July 2016

Birr'000 Birr'000 Birr'000

   

    
 
      

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Agriculture 15,391 11,401 17,303

Construction 659,710 690,075 401,775
Domestic trade and services 598,920 481,163 307,808
Emergency staff loan 17,484 9,947 5,602
Export 623,975 377,793 303,251
Import 614,793 495,522 383,767
Industry 560,660 198,949 102,084
Personal 20,731 10,959 5,938
Staff residential loan 35,489 30,419 22,401
Staff vehicle loan 2,260 2,808 3,225
Hotel 39,639
Transport 185,174 117,316 71,737

3,334,587 2,465,991 1,624,891

(ii) Gross loans and receivables to customers per National Bank of Ethiopia's impairment guidelines is analysed as follows:

30 June 2018 30 June 2017 1 July 2016

Birr'000 Birr'000 Birr'000

Pass 3,105,458 2,341,164 1,609,929

Special mention 172,073 92,324 5,726
Substandard 16,378 12,537 4,518
Doubtful 35,429 14,317 4,718
Loss 5,249 5,648 -

3,334,587 2,465,991 1,624,891

The above table represents a worse case scenario of credit risk exposure of the Bank as at the reporting dates without taking account of
any collateral held or other credit enhancements attached. The exposures are based on net carrying amounts as reported in the statement
of financial position.

Management is confident in its ability to continue to control and effectively manage the credit risk exposure in the Bank's loan and
advances portfolio.
 ANNUAL REPORT 2017/18 51

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

4.3.5 Credit quality analysis

(a) Credit quality of cash and cash equivalents

The credit quality of cash and cash equivalents and short-term investments that were neither past due nor impaired at as 30 June 2018,
30 June 2017 and 30 June 2016 and are held in Ethiopian banks have been classified as non-rated as there are no credit rating agencies
in Ethiopia. However, cash and cash equivalents that held in foreign banks can be assessed by reference to credit rating agency

   

   

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designation as shown in the table below;

30 June 2018 30 June 2017 1 July 2016
Birr'000 Birr'000 Birr'000

A
BBB 78,704 278,939 112,292
Not rated

A High credit quality :

This denote expectations of low default risk. The capacity for payment of financial
commitments is considered strong. This capacity may, nevertheless, be more vulnerable to
adverse business or economic conditions than is the case for higher ratings.

BBB Good credit quality :

This indicates that expectations of default risk are currently low. The capacity for payment
of financial commitments is considered adequate, but adverse business or economic
conditions are more likely to impair this capacity.

Not rated : This indicates financial institutions or other counterparties with no available ratings and
cash in hand.

A "+ "(plus) or "-" (minus) may be appended to a rating to indicate the relative position of a credit within the rating category. This is based
on Fitch national long-term issuer default ratings.

(b) Credit quality of loans and receivables

Neither past due Past due but not Individually
nor impaired impaired impaired Total
30 June 2018 Birr'000 Birr'000 Birr'000 Birr'000

Agriculture 5,056 10,335 15,391

Construction 634,933 17,357 5,726 658,016
Domestic trade and services 564,330 10,642 22,902 597,873
Emergency staff loan 17,304 17,304
Export 552,659 71,318 623,977
Import 582,373 24,334 6,193 612,901
Industry 535,041 15,127 10,480 560,648
Personal 20,934 41 20,975
Staff residential loan 40,042 40,042
Staff vehicle loan 2,283 2,283
Transport 182,416 1,380 1,380 185,177
3,137,372 140,158 57,056 3,334,587
Gross
Less: Impairment allowance (note 16) (9,678) (1,149) (9,808) (20,635)

Net 3,127,694 139,009 47,248 3,313,951

52 ANNUAL REPORT 2017/18

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

Neither past due Past due but not Individually

nor impaired impaired impaired Total
30 June 2017 Birr'000 Birr'000 Birr'000 Birr'000

Agriculture 1,567 9,835 11,401

Construction 667,795 8,885 9,131 685,811
Domestic trade and services
   

   

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475,909 26,345 8,514 510,769

Emergency staff loan 11,138 11,138
Export 313,650 65,049 378,700
Import 494,058 8,121 13,032 515,212
Industry 177,484 832 1,825 180,142
Personal 11,827 11,827
Staff residential loan 40,607 40,607
Staff vehicle loan 3,358 3,358
Transport 117,028 117,028
2,314,420.96 119,067.71 32,502.43 2,465,991
Gross
Less: Impairment allowance (note 16) (4,453) (572) (10,482) (15,507)

Net 2,309,968 118,496 22,020 2,450,484

Neither past due Past due but not Individually

nor impaired impaired impaired Total
1 July 2016 Birr'000 Birr'000 Birr'000 Birr'000

Agriculture 17,294 - - 17,294

Construction 399,809 298 1,207 401,314
Domestic trade and services 304,259 1,340 610 306,208
Emergency staff loan 5,482 - - 5,482
Export 311,847 - - 311,847
Import 375,011 738 7,419 383,168
Industry 96,234 - - 96,234
Personal 6,016 43 - 6,059
Staff residential loan 22,413 - - 22,413
Staff vehicle loan 3,224 - - 3,224
Transport 68,399 3,307 - 71,706
1,609,988 5,726 9,236 1,624,951
Gross
Less: Impairment allowance (note 16) (1,604) (12) (2,788) (4,404)

Net 1,608,385 5,714 6,448 1,620,547

Individually impaired loans are loans that has well passed their recovery period.
 ANNUAL REPORT 2017/18 53

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

(i) Loans and receivables - neither past due nor impaired

The credit quality of the portfolio of loans and receivables that were neither past due nor impaired can be assessed by reference to the
customer's ability to pay based on loss experience. Loans and receivables in this category are short term loans past due for less than 30
(thirty) loans and medium and long term loans past due for less than 180 (one hundred eighty) days.

   

   

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Neither past due nor impaired 3,137,372 2,314,421 1,609,988

Collective impairment (9,678) (4,453) (1,604)

3,127,694 2,309,968 1,608,385

(ii) Loans and receivables - past due but not impaired

30 June 2018 30 June 2017 1 July 2016
Birr'000 Birr'000 Birr'000
A High credit quality :
This denote expectations of low default risk. The
capacity for payment of financial
commitments is considered strong. This capacity
may, nevertheless, be more vulnerable to
adverse business or economic conditions than is
the case for higher ratings.

BBB Good credit quality :

This indicates that expectations of default risk
are currently low. The capacity for payment
of financial commitments is considered
adequate, but adverse business or economic A A A
conditions are more likely to impair this
capacity.

Not rated : This indicates financial institutions

or other counterparties with no available ratings
and B284:G321
cash in hand.

A "+ "(plus) or "-" (minus) may be appended to a

rating to indicate the relative position of a credit
within the rating category. This is based on Fitch
national long-term issuer default ratings.

Loans and receivables that have been classified as neither past due nor impaired or past due but not impaired are assessed on a collective
basis.

(iii) Loans and receivables - individually impaired loans

30 June 2018 30 June 2017 1 July 2016
Birr'000 Birr'000 Birr'000

Substandard 16378.177 12536.682 4,518

Doubtful 35428.829 14317.381 4,718
Loss 5249.318 5648.366 -

57,056 32,502 9,236

(iv) Allowance for impairment

30 June 2018 30 June 2017 1 July 2016

Birr'000 Birr'000 Birr'000

Specific impairment 1,775 32,502

Collective impairment 18,860 15,506 4,404

Total allowance for impairment 20,635 48,008 4,404

54 ANNUAL REPORT 2017/18

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

4.3.6 Credit concentrations

The Bank monitors concentrations of credit risk by social sector. An analysis of concentrations of credit risk at 30 June 2018, 30 June
2017 and 30 June 2016. The Bank concentrates all its financial assets in Ethiopia.

Public
Enterprise Cooperative Private

   

    
 
      

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30 June 2018 Birr'000 Birr'000 Birr'000

Cash and balances with 1,307,717

Loans and receivables 3,313,951
Investment securities:
- Available for sale 15,902
- Loans and receivables 1,379,940
Other assets 312,343
Letters of guarantee 1,145,811

- - 7,475,663

Public
Enterprise Cooperative Private
30 June 2017 Birr'000 Birr'000 Birr'000

Cash and balances with 1,085,418

Loans and receivables 2,450,484
Investment securities:
- Available for sale 15,270
- Loans and receivables 971,546
Other assets 233,253
Letters of guarantee 1,285,140

- - 6,041,111.50

Public
Enterprise Cooperative Private
1 July 2016 Birr'000 Birr'000 Birr'000

Cash and balances with 1,307,717

Loans and receivables 3,313,951
Investment securities:
- Available for sale 15,902
- Loans and receivables 1,379,940
Other assets 312,343
Letters of guarantee 2,122,436

- - 8,452,287.99
 ANNUAL REPORT 2017/18 55

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

4.3.7 Nature of security in respect of loans and receivables

Secured against Bank guarantees Equitable Shares Others

real estate Mortgage

30 June 2018 Birr'000 Birr'000 Birr'000 Birr'000 Birr'000

   

    
 
      

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Agriculture 10,335 5,056

Construction 416,882 1,162 187,635
Domestic trade and services 461,499 3,083 127,962
Emergency staff loan 19,872
Export 196,483 421,444
Import 473,406 62,005 75,490
Industry 389,151 122,848
Personal 291 22,613
Staff residential loan 49,022
Staff vehicle loan 2,676
Transport 11,874 8,864

1,959,921.00 66,250.00 1,043,481.45

Secured against Bank guarantees Equitable Shares Others

real estate Mortgage
30 June 2017 Birr'000 Birr'000 Birr'000 Birr'000 Birr'000

Agriculture 11,322 525

Construction 566,053 1,261 114,235
Domestic trade and services 429,509 391 25,418
Emergency staff loan 11,138
Export 169,047 200,251
Import 447,975 47,540
Industry 101,935 28,595
Personal 551 18,276
Staff residential loan 40,607
Staff vehicle loan 3,358
Hotel 39,640
Transport 23,881

- - 1,789,913.00 1,652.00 489,942.78

Secured against Equitable

real estate Bank guarantees Mortgage Shares Others
1 July 2016 Birr'000 Birr'000 Birr'000 Birr'000 Birr'000

Agriculture 17,294 - - - -
Construction 340,849 - 60,466 - -
Domestic trade and services 275,668 - 7,074 1,187 22,285
Emergency staff loan - 6,340 - - -
Export 119,638 2,332 12,592 - 177,286
Import 351,648 - 11,071 4,462 15,986
Industry 73,708 - 17,901 - 4,626
Personal 860 5,060 40 - 437
Staff residential loan 29,628 - - - -
Staff vehicle loan - - 3,890 - -
Transport 42,294 - 29,412 - -

1,251,585 13,732 142,447 5,649 220,620

56 ANNUAL REPORT 2017/18

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

4.3.8 Collateral held and their financial effect

The general creditworthiness of a customer tends to be the most relevant indicator of credit quality of a loan extended to it. However,
collateral provides additional security and the Bank generally requests that corporate borrowers provide it. Staff loans are secured to the
extent of the employee's continued employment in the Bank.

   

    
 
      

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The Bank may take collateral in the form of a first charge over real estate, liens and guarantees. The Bank does not sell or repledge the
collateral in the absence of default by the owner of the collateral. In addition to the Bank's focus on creditworthiness, the Bank aligns with
its credit policy guide to periodically update the validation of collaterals held against all loans to customers.

For impaired loans, the Bank obtains appraisals of collateral because the fair value of the collateral is an input to the impairment
measurement.

The fair value of the collaterals are based on the last revaluations carried out by the Bank's in-house engineers. The valuation technique
adopted for properties is in line with the Bank's valuation manual and the revalued amount is similar to fair values of properties with
similar size and location.

The fair value of collaterals other than properties such as share certificates, cash, NBE bills etc. as disclosed at the carrying amount as
management is of the opinion that the cost of the process of establishing the fair value of the collateral exceeds benefits accruable from the
exercise.

4.4 Liquidity risk

Liquidity risk is the risk that the Bank cannot meet its maturing obligations when they become due, at reasonable cost and in a timely
manner. Liquidity risk arises because of the possibility that the Bank might be unable to meet its payment obligations when they fall due
as a result of mismatches in the timing of the cash flows under both normal and stress circumstances. Such scenarios could occur when
funding needed for illiquid asset positions is not available to the Bank on acceptable terms.

Liquidity risk management in the Bank is solely determined by Asset and Liability Committee, which bears the overall responsibility for
liquidity risk. The main objective of the Bank's liquidity risk framework is to maintain sufficient liquidity in order to ensure that we meet
our maturing obligations.

4.4.1 Management of liquidity risk

Cash flow forecasting is performed by the finance department. The finance department monitors rolling forecasts of liquidity
requirements to ensure it has sufficient cash to meet operational needs.

The Bank has incurred indebtedness in the form of borrowings. The Bank evaluates its ability to meet its obligations on an ongoing basis.
Based on these evaluations, the Bank devises strategies to manage its liquidity risk.

Prudent liquidity risk management implies that sufficient cash is maintained and that sufficient funding is available o meet its liabilities
when due, under both normal and stressed conditions, without incurring unacceptable losses or risk damage to the Bank’s reputation.

4.4.2 Financing arrangements

The Bank has access to the following undrawn borrowing facilities at the end of the reporting period:

30 June 2018 30 June 2017 1 July 2016

Birr'000 Birr'000 Birr'000

Expiring within one year (borrowings) 156,252 118,340 94,752

Expiring beyond one year (borrowings) - - -

156,252 118,340 94,752

 ANNUAL REPORT 2017/18 57

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

4.4.3 Maturity analysis of financial liabilities

The table below analyses the Bank’s financial liabilities into relevant maturity groupings based on the remaining period at the statement
of financial position date to the contractual maturity date. The cash flows presented are the undiscounted amounts to be settled in future.

   

    
 
      

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0 - 30 days 31 - 90 days 91 - 180 days 181 - 365 days Over 1 year

30 June 2018 Birr'000 Birr'000 Birr'000 Birr'000 Birr'000

Deposits from customers 1465993.56 1210280.44 618221.32 705222.68 976661

Debt securities issued
Borrowings 8539 8538
Other liabilities 42865 85729

Total financial liabilities 1,508,858.56 1,296,009.44 618,221.32 713,761.68 985,199.00

0 - 30 days 31 - 90 days 91 - 180 days 181 - 365 days Over 1 year

30 June 2017 Birr'000 Birr'000 Birr'000 Birr'000 Birr'000

Deposits from customers 689,463 1,175,578 692,718 343,311 950,938

Debt securities issued - - - - -
Borrowings - - - - -
Other liabilities 28,533 57,066 18,264

Total financial liabilities 717,996.24 1,232,644.00 710,982.00 343,311.00 950,938.00

0 - 30 days 31 - 90 days 91 - 180 days 181 - 365 days Over 1 year

1 July 2016 Birr'000 Birr'000 Birr'000 Birr'000 Birr'000

Deposits from customers 260,021 881,534 391,594 349,788 616,876

Debt securities issued
Borrowings
Other liabilities 37,722 75,444

Total financial liabilities 297,743 956,978 391,594 349,788 616,876

4.5 Market risk

Market risk is defined as the risk of loss risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market risk factors such as interest rates, foreign exchange rates, equity prices, credit spreads and their volatilities. Market
risk can arise in conjunction with trading and non-trading activities of a financial institutions.

The Bank does not ordinarily engage in trading activities as there are no active markets in Ethiopia.

4.5.1 Management of market risk

The main objective of Market Risk Management is to manage and control market risk exposures within acceptable parameters, while
optimising the return on risk.

4.5.2 Management of market risk

Market risk is monitored by the risk management department on regularly, to identify any adverse movement in the underlying variables.
58 ANNUAL REPORT 2017/18

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

(i) Interest rate risk

Interest rate risk is the risk that the value of a financial instrument will be affected by changes in market interest rates. Borrowings
obtained at variable rates give rise to interest rate risk.

The Bank’s exposure to the risk of changes in market interest rates relates primarily to the Bank’s obligations and financial assets with
floating interest rates. The Bank is also exposed on fixed rate financial assets and financial liabilities. The Bank’s investment portfolio is
comprised of treasury bills, Ethiopian government bonds and cash deposits.

Non-interest
30 June 2018 Fixed Floating bearing Total
Birr'000 Birr'000 Birr'000 Birr'000
Assets
Cash and balances with banks 226,747 78,704 1,002,266 1,307,717
Loans and receivables 3,313,951 3,313,951
Total 3,540,698 78,704 1,002,266 4,621,668

Liabilities
Deposits from customers 4,092,128 998,398 5,090,526
Debt securities issued -
Other liabilities 128,947 128,947
Total 4,092,128 - 1,127,345 5,219,473

30 June 2017 Fixed Floating Non-interest Total

bearing
Birr'000 Birr'000 Birr'000 Birr'000
Assets
Cash and balances with banks 182,812 278,939 623,667 1,085,418
Loans and receivables 2,450,484 2,450,484
Total 2,633,296 278,939 623,667 3,535,902

Liabilities
Deposits from customers 3,061,936 790,072 3,852,008
Debt securities issued -
Other liabilities 103,756 103,756
Total 3,061,936 - 893,828 3,955,764

1 July 2016 Fixed Floating Non-interest Total

bearing
Birr'000 Birr'000 Birr'000 Birr'000
Assets
Cash and balances with banks 201,797 112,292 453,345 767,434
Loans and receivables 1,620,487 1,620,487
Total 1,822,284 112,292 453,345 2,387,921

Liabilities
Deposits from customers 1,855,154 644,660 2,499,814
Other liabilities 113,107 113,107
Total 1,855,154 - 757,767 2,612,921
 ANNUAL REPORT 2017/18 59

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

The sensitivity of the income statement is the effect of the assumed changes in interest rates on the profit or
loss for a year, based on the floating rate non–trading financial assets and financial liabilities held at 30 June 2018, 30 June 2017 and 1
July 2016. The total sensitivity of equity is based on the assumption that there are parallel shifts in the yield curve.

Increase
(decrease)

   

   

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in basis points 30 June 2018 30 June 2017 1 July 2016
Birr'000 Birr'000 Birr'000 Birr'000

USD - Sensitivity on equity 10% (59,780) (41,986) (22,500)

USD - Sensitivity on profit or loss 10% 21,652 14,651 5,957

(ii) Foreign exchange risk

Foreign exchange risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to the changes in
foreign exchange rates.

The Bank is exposed to exchange rate risks to the extent of balances and transactions denominated in a currency other than the Ethiopian
Birr. The Bank’s foreign currency bank accounts act as a natural hedge for these transactions. Management has set up a policy to manage
the Bank's foreign exchange risk against its functional currency.

The table below summarises the impact of increases/decreases of 10% on equity and profit or loss arising from the Bank's foreign
denominated borrowings and cash and bank balances.

The total foreign currency denominated assets and liabilities exposed to risk as at year end is a shown below :

Foreign currency denominated balances

30 June 2018 30 June 2017 1 July 2016
Birr'000 Birr'000 Birr'000

Cash and bank balances 79,613 280,193 113,037

Deposit from customers 217,446 200,163 62,482

79,613 280,193 113,037

Sensitivity analysis for foreign exchange risk

The sensitivity analysis for currency rate risk shows how changes in the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market rates at the reporting date.

The sensitivity of the Bank's earnings to fluctuations in exchange rates is reflected by varying the exchange rates at 10% as shown below:

30 June 2018 30 June 2017 1 July 2016

Birr'000 Birr'000 Birr'000

Impact on profit or loss 10% change in exchange rates (13,783) 8,003 5,056

4.6 Capital management

The Bank’s objectives when managing capital are to comply with the capital requirements set by the National Bank of Ethiopia, safeguard
its ability to continue as a going concern, and to maintain a strong capital base so as to maintain investor, creditor and market confidence
and to sustain future development of the business.
60 ANNUAL REPORT 2017/18

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

4.6.1Capital adequacy ratio

According to the Licensing & Supervision of Banking Business Directive No SBB/50/2011 of the National Bank of Ethiopia, the Bank has
to maintain capital to risk weighted assets ratio of 8% at all times, the risk weighted assets being calculated as per the provisions of
Directive No SBB/9/95 issued on August 18, 1995.

The capital adequacy ratio is the quotient of the capital base of the Bank and the Bank’s risk weighted asset base. Capital includes capital

   

   

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contribution, retained earnings, legal reserve and other reserves to be approved by the National Bank of Ethiopia.
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30 June 2018 30 June 2017 1 July 2016

Birr'000 Birr'000 Birr'000

Capital
Capital contribution 971,011 763,917 565,130
Retained earnings 72,404 38,887 18,136
Legal reserve 104,884 65,165 40,217
1,148,299.02 867,968.62 623,483
Risk weighted assets
Risk weighted balance for on-balance sheet items 4,117,180 2,904,181 1,745,769
Credit equivalents for off-balance sheet items 1,183,960 826,738 609,750
5,301,140.00 3,730,919.00 2,355,519

Risk-weighted Capital Adequacy Ratio (CAR) 22% 23% 26%

Minimum required capital 8% 8% 8%
Excess 14% 15% 18%

4.7 Fair value of financial assets and liabilities

IFRS 13 requires an entity to classify measured or disclosed fair values according to a hierarchy that reflects the significance of observable
inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value
hierarchy, which comprises of three levels as described below, based on the lowest level input that is significant to the fair value
measurement as a whole.

4.7.1 Valuation models

IFRS 13 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or
unobservable. Observable input reflect market data obtained from independent sources; unobservable inputs reflect the Bank's market
assumptions.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value
hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole.

• Level 1: Inputs that are quoted market prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices)
or indirectly (i.e. derived from prices) .This category includes instruments valued using: quoted market prices in active markets for similar
instruments; quoted prices for identical or similar instruments in markets that are considered less than active, or other valuation
technique in which all significant inputs are directly or indirectly observable from market data.

In conclusion, this category is for valuation techniques for which the lowest level input that is significant to the fair value measurement is
directly or indirectly observable.

• Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs). This category includes all
assets and liabilities for which the valuation technique includes inputs not based on observable date and the unobservable inputs have a
significant effect on the asset or liability's valuation. This category includes instruments that are valued based on quoted prices for similar
instruments for which significant unobservable adjustments or assumptions are required to reflect differences between the instruments.
 ANNUAL REPORT 2017/18 61

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

4.7.2 Financial instruments not measured at fair value - Fair value hierarchy

The following table summarises the carrying amounts of financial assets and liabilities at the reporting date by the level in the fair value
hierarchy into which the fair value measurement is categorised. The amounts are based on the values recognised in the statement of
financial position.
   

   

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Carrying amount Fair value

30 June 2018 Birr'000 Birr'000
Financial assets
Cash and balances with banks 1,307,717 1,307,716.84
Loans and receivables 3,313,951 3,313,950.83
Investment securities 1,395,842 1,395,841.59
Total 6,017,510.00 6,017,509.26

Financial liabilities
Deposits from customers 5,090,526
Debt securities issued
Borrowings 17,177
Other liabilities 129,946
Total 5,237,649.06 -

Carrying amount Fair value

30 June 2017 Birr'000 Birr'000
Financial assets
Cash and balances with banks 1,085,418 1085418
Loans and receivables 2,450,592 2450484
Investment securities 986,816 986816
Total 4,522,826.00 4,522,718.00

Financial liabilities
Deposits from customers 3,852,008
Debt securities issued
Borrowings
Other liabilities 103,756
Total 3,955,763.68 -

Carrying amount Fair value

1 July 2016 Birr'000 Birr'000
Financial assets
Cash and balances with banks 767,434 767,434
Loans and receivables 1,620,487 1,620,487
Investment securities 562,659 562,659
Total 2,950,580 2,950,580

Financial liabilities
Deposits from customers 2,499,814 2,499,814
Other liabilities 113,107 113,107
Total 2,612,921 2,612,921
62 ANNUAL REPORT 2017/18

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

4.7.3 Fair value menthods and assumptions

(a) Loans and advances

Loans and advances to customers are carried at amortised cost net of provision for impairment. The estimated fair value represents

   

    
 
      

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4.7.4 Valuation techniques using significant unobservable inputs - Level 3

The Bank has no financial asset measured at fair value on subsequent recognition.

4.7.5 Estimation uncertainty in measuring impairment losses on loans and advances to customers

The table below sets out the information on the sensitivity of carrying amounts to the methods, assumptions and estimates used in
calculating impairment losses on loans and advances for customers as at 30 June 2018, 30 June 2017 and 1 July 2016 that have a
significant risk of causing a material adjustment to the carrying amounts of these assets within the next financial year, including the
reasons for the sensitivity.
Significant Ranges of input Fair value
Types of financial observable (Probability measurement to
intruments Fair values input weighted average) unobservable
inputs
Loans and advances to customers Probability of Significant increases
01 July 2016 1,620,487 default 0.21% in any of these inputs
30 June 2017 2,450,484 0.48% would result in lower
30 June 2018 3,313,951 0.57% fair values and vice
versa
Loss given default
01 July 2016 1,620,487 30%
30 June 2017 2,450,484 32%
30 June 2018 3,313,951 30%

4.7.6 Transfers between the fair value hierarchy categories

During the three reporting periods covered by these annual financial statements, there were no movements between levels as a result of
significant inputs to the fair valuation process becoming observable or unobservable.

4.8 Offsetting financial assets and financial liabilities

There are no offsetting arrangements. Financial assets and liabilities are settled and disclosed on a gross basis.
 ANNUAL REPORT 2017/18 63

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements
30 June 2018 30 June 2017
Birr'000 Birr'000
5 Interest income

Interest on term loans 332,958 204,683

Interest on import and export facilities 972 621
Interest on overdraft 105,433 64,538
Interest on deposits with domestic banks

   

   

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14,362 10,832
Interest on NBE bills 35,246 22,770
 

Interest earned on correspondents 638

489,608 303,444

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Birr'000 Birr'000
6 Interest expense

Interest on customer deposits (106,725) (149,998)

Interest on customer savings (205,418) (50,677)
Interest on other deposits - (1)

(312,143) (200,676)

30 June 2018 30 June 2017

Birr'000 Birr'000
7 Net fees and commission income

Fee and commission income

Financial guarantee contracts issued 149,966 152,855

Commission on letters of credit 35,052 15,085
Cashier payment order 327 289
Commission on managed funds 118 51

185,463 168,280
Fee and commission expense
-

Net fees and commission income 185,463 168,280

30 June 2018 30 June 2017

Birr'000 Birr'000
8 Other operating income

Net gain on foreign exchange 10,142 17,014

Service charge 61,079 30,502
Other income 3,058 1,174
Correspondent charges 449 260
Dividend income 616 55
Postage and processing fees 8 8
Swift charges 242 80
Penalty Charge Income 597 30

76,190 49,123

30 June 2018 30 June 2017

Birr'000 Birr'000
9 Loan impairment charge

Loans and receivables - charge for the year Note 15(a) (5,128) (11,102)
Loans and receivables - reversal of provision Note 15(a) -

(5,128) (11,102)
64 ANNUAL REPORT 2017/18

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

30 June 2018 30 June 2017

Birr'000 Birr'000
10 Impairment losses on other assets

Other assets - charge for the year Note 17 -

Other assets - reversal of impairment losses Note 17

   

    
 
      

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Birr'000 Birr'000
11 Personnel expenses
Short term employee benefits :
Salaries and wages (72,522) (47,181)
Staff allowances (9,595) (5,624)
Overtime (404) (219)
Bonus (15,094) (14,135)
Pension costs – Defined contribution plan (8,569) (5,510)
Other staff expenses (11,001) (8,921)
(117,185) (81,590)
Long term employee benefits :
Pension costs - Defined benefit plans (1,011) (859)
(1,011) (859)

(118,196) (82,449)

30 June 2018 30 June 2017

Birr'000 Birr'000
12 Other operating expenses

Rental expenses (35,652) (28,655)

Office supplies and sundry (7,102) (5,180)
Advertisement and Publicity (4,541) (4,609)
Commissions (5,278) (4,544)
Electricity, telephone and internet (5,439) (4,145)
Travelling expenses (635) (2,628)
Repairs and maintenance (4,584) (2,208)
Event organization expense (1,399) (1,830)
Fuel and lubricants (2,133) (1,649)
Per diem administration (348) (1,147)
Represenation allowance (1,206) (1,095)
Insurance (1,195) (1,094)
Legal and professional fees (3,642) (834)
Entertainment (925) (726)
Director fees (836) (550)
Correspondent costs (514) (306)
Bank charges (484) (257)
Subscription and Publication (222) (253)
Wages for non employees (221) (180)
Women loan expense (402) (147)
Audit fees (184) (98)
Donations (206) (23)
Postage and stamps (40) (58)
Security expenses (4) (5)

(77,193) (62,221)
 ANNUAL REPORT 2017/18 65

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

30 June 2018 30 June 2017

Birr'000 Birr'000

13 Company income and deferred tax

13a Current income tax
Company income tax 48,121 32,580

   

    
 
      

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Prior year (over)/ under provision -

Deferred income tax/(credit) to profit or loss 9,529 1,727
Total charge to profit or loss 57,649 34,307
Tax (credit) on other comprehensive income (878) 39
Total tax in statement of comprehensive income 56,772 34,346

13b Reconciliation of effective tax to statutory tax

The tax on the Bank’s profit before income tax differs from the theoretical amount that would arise using the statutory income tax
rate as follows:

30 June 2018 30 June 2017

Birr'000 Birr'000
Profit before tax 215,648 146,510

Add : Disallowed expenses

Donation 206 23
Deferred Expense 76 76
Entertainment 925 726
Annual staff day Expense 469
Severance Pay temporary difference 1,011 859
Provision for loans and advances as per IFRs 5,129 11,102
Depreciation for accounting purpose 16,385 12,199
Amortization for accounting purpose 5,690 5,690

Total disallowable expenses 29,422 31,144

Less : Allowable expense

Depreciation for tax purpose 24,216 22,778
Interest income on NBE Bills 35,246 22,819
Interest income on Deposits with other Banks 14,362 10,832
Provision for loans and advances for tax NBE 80% 10,228 12,569
Dividend Taxed at source 616 55

Total allowable expenses 84,668 69,053

Taxable profit 160,402 108,601

Current tax at 30% 48,121 32,580

30 June 2018 30 June 1 July 2016

13c Current income tax assets / (liability) Birr'000 Birr'000 Birr'000

Balance at the beginning of the year (15,106) (3,092) (10,648)

Current year provision (48,121) (32,581) (3,095)
WHT Notes utilised 1 2 3
Payment during the year 27,228 20,565 10,648

Balance at the end of the year (35,998) (15,106) (3,092)

13d Deferred income tax

Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against
which the temporary differences can be utilised.
66 ANNUAL REPORT 2017/18

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

30 June 2018 30 June 1 July 2016

Birr'000 Birr'000 Birr'000

The analysis of deferred tax assets/(liabilities) is as follows:

To be recovered after more than 12 months (15,455) (6,804) (5,038)
To be recovered within 12 months

   

   

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Deferred income tax assets and liabilities, deferred income tax charge/(credit) in profit or loss ("P/L), in equity and other
comprehensive income are attributable to the following items:

Deferred income tax assets/(liabilities): At 1 July Credit/ Credit/ 30 June

2017 (charge) to P/L (charge) to 2018
equity
Birr'000 Birr'000 Birr'000 Birr'000
Property, plant and equipment (7,569) -9,800 (17,369)
Provisions -
Unrealised exchange gain -
Tax losses charged to profit or loss -
Post employment benefit obligation 765 272 878 1,914
Total deferred tax assets/(liabilities) (6,804) (9,529) 878 (15,455)

Credit/ Credit/
At 1 July (charge) to P/L (charge) to 30 June
Deferred income tax assets/(liabilities): 2016 equity 2017
Birr'000 Birr'000 Birr'000 Birr'000

Property, plant and equipment (5,584) (1,985) (7,569)

Provisions - - -
Unrealised exchange gain - - -
Tax losses charged to profit or loss - - -
Post employment benefit obligation 546 258 (39) 765
Total deferred tax assets/(liabilities) (5,038) (1,727) (39) (6,804)

30 June 2018 30 June 1 July 2016

Birr'000 Birr'000 Birr'000
14 Cash and balances with banks

Cash in hand 226,866 246,015 147,119

Balance held with National Bank of Ethiopia 775,399 377,652 306,226
Deposits with local banks 226,747 182,812 201,797
Deposits with foreign banks 78,704 278,939 112,292

1,307,717 1,085,418 767,434

Maturity analysis 30 June 2018 30 June 1 July 2016

Birr'000 Birr'000 Birr'000

Current 1,072,717 915,418 663,434

Non-Current 235,000 170,000 104,000

1,307,717 1,085,418 767,434

Cash and cash equivalents in the statement of cash flows are the same as on the statement of financial position as the Bank had no
bank overdrafts at the end of each reporting period.
 ANNUAL REPORT 2017/18 67

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

30 June 2018 30 June 1 July 2016

Birr'000 Birr'000 Birr'000
15 Loans and receivables

Agriculture 15,391 11,401 17,303

Industry 560,660 198,949 102,084

   

    
 
      

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Construction 659,710 690,075 401,775

Domestic Trade and Services 598,920 481,163 307,808
Personal loans 20,731 10,959 5,938
Export 623,975 377,793 303,251
Import 614,793 495,522 383,767
Transportation 185,174 117,316 71,737
Emergency Staff Loan 17,484 9,947 5,602
Staff Residential Loan 35,489 30,419 22,401
Staff Vehicle Loan 2,260 2,808 3,225
Hotel -1 39,639

Gross amount 3,334,586 2,465,991 1,624,891

Less: Impairment allowance (note 16a)
Specific impairment 1,775 - -
Collective impairment 18,860 15,507 4,404

3,313,951 2,450,484 1,620,487

16a Impairment allowance on loans and receivables

A reconciliation of the allowance for impairment losses for loans and receivables by class, is as follows:

As at 1 Charge for As at 30 June Charge for As at 30

Collective allowance for impairment July 2016 the year 2017 the year June 2018
Birr'000 Birr'000 Birr'000 Birr'000 Birr'000

Collective Agriculture 11 7 18 650 668

Collective Industry 61 806 867 1,954 2,821
Collective Construction 615 3,401 4,016 (459) 3,557
Collective Domestic Trade and Services 376 3,118 3,494 2,789 6,283
Collective Personal loans 11 42 53 19 72
Collective Export 195 395 590 1,052 1,642
Collective Import 3,057 3,045 6,102 (3,402) 2,700
Collective Transportation 45 138 183 744 927
Collective Emergency Staff Loan 13 41 54 (2) 52
Collective Staff Residential Loan 19 44 63 66 129
Collective Staff Vehicle Loan 2 3 5 2 7
Collective Hotel - 62 62 (62) -

4,404 11,102 15,507 3,353 18,860

68 ANNUAL REPORT 2017/18

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

As at 1 Charge for As at 30 June Charge for As at 30

Specific allowance for impairment July 2016 the year 2017 the year June 2018
Birr'000 Birr'000 Birr'000 Birr'000 Birr'000

Specific Agriculture - - - 289 289

Specific Industry - - - -
Specific Construction

   

    
 
      

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Specific Domestic Trade and Services - - - -

Specific Personal loans - - - -
Specific Export - - - -
Specific Import - - - 1,487 1,487
Specific Transportation - - - -
Specific Emergency Staff Loan - - - -
Specific Staff Residential Loan - - - -
Specific Staff Vehicle Loan - - - -
Specific Hotel - - - -

- - - 1,775 1,775

Total - Impairment 4,404 11,102 15,507 5,128 20,635

30 June 2018 30 June 1 July 2016

Birr'000 Birr'000 Birr'000
17 Investment securities

Available for sale:

Equity Investments 15,902 15,270 15,270

15,902 15,270 15,270

Loans and receivables:
Treasury bills 1,379,940 971,546 547,389

Gross amount 1,379,940 971,546 547,389

Less individual allowance for impairment -

1,395,842 986,816 562,659

Maturity analysis 30 June 2018 30 June 1 July 2016

Birr'000 Birr'000 Birr'000

Current 126,743 14,771 8,083

Non-Current 1,269,099 972,045 554,576

1,395,842 986,816 562,659

The Bank hold equity investments in Eth-switch of 6% (30 June 2017: 6%, 1 July 2016: 6%) and United
Insurance Share Company of 2% (30 June 2017: 2%, 1 July 2016: 2%). These investments are unquoted equity
securities measured at cost.

The fair value of the unquoted equity securities carried at cost cannot be reliably estimated as there are no active
market for these financial instruments; they have therefore been disclosed at cost less impairment.
 ANNUAL REPORT 2017/18 69

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

30 June 2018 30 June 2017 1 July 2016

Birr'000 Birr'000 Birr'000
18 Other assets

Financial assets

Prepaid staff expense
   

   

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18,736 13,119 9,246

Prepaid Assets Women loans 889 302 9
Uncleared effects 4,909 9,398 3,527

24,534 22,819 12,782

Non-financial assets

Items in course of collection 12,285 12,571 38,863

Deposit and Prepayments 135,150 95,029 73,615
Sundry receivables 137,547 98,599 81,998
Inventory and office supplies 2,828 4,463 2,905
-
287,809 210,662 197,381

Less :
Impairment allowance on other assets - 228 228

Gross amount 312,343 233,253 209,935

Maturity analysis 30 June 2018 30 June 2017 1 July 2016

Birr'000 Birr'000 Birr'000

Current 312,343 233,253 209,935

Non-Current - -

312,343 233,253 209,935

18a Impairment allowance on other assets

A reconciliation of the allowance for impairment losses for other assets is as follows:

30 June 2018 30 June 1 July 2016

Birr'000 Birr'000 Birr'000
Balance at the beginning of the year 228 228
(Reversal)/charge for the year (note 10) - -

Balance at the end of the year - 228 228

18b Inventory

A breakdown of the items included within inventory is as follows:

30 June 2018 30 June 2017 1 July 2016
Birr'000 Birr'000 Birr'000

Stationary stock account 957 1,474 1,259

Other stock 834 1,628 356
Stock accounts 497 842 982
Uniform stock 259 267 105
Cheque book stock 280 252 140
Coupon stock - - 64

2,828 4,463 2,905

70 ANNUAL REPORT 2017/18

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

19 Intangible Assets

Purchased
software
Birr'000
Cost:

   

    
 
      

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As at 1 July 2016 28,592

Acquisitions 5,157
Reclassifications -
As at 30 June 2017 33,749

As at 1 July 2017 33,749

Acquisitions -
Reclassifications -
As at 30 June 2018 33,749

Accumulated amortisation and impairment losses

As at 1 July 2016 2,781

Amortisation for the year 5,690
Impairment losses
As at 30 June 2017 8,471

As at 1 July 2017 8,471

Amortisation for the year 5,691
Impairment losses
As at 30 June 2018 14,162

Net book value

As at 1 July 2016 25,811
As at 30 June 2017 25,278
As at 30 June 2018 19,587
 ANNUAL REPORT 2017/18 71

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

Motor Premises Office and other Furniture Computer Total

vehicles equipment and fittings and
Birr'000 Birr'000 Birr'000 Birr'000 Birr'000 Birr'000

20 Property, plant and equipment

   

   

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Cost:

As at 1 July 2016 28,835 - 13,539 22,057 28,579 93,010

Additions 7,626 - 9,469 8,228 2,415 27,738
Reclassifications - - 1,219 (309) 829 1,739
Disposals - - (2) - (15) (18)
As at 30 June 2017 36,461 - 24,225 29,976 31,807 122,469

As at 1 July 2017 36,461 - 24,225 29,976 31,807 122,469

Additions 4,026 31,673 4,281 5,275 918 46,173
Disposals - - (3) - (3)
Reclassification - - -
As at 30 June 2018 40,487 31,673 28,503 35,251 32,725 168,639

Accumulated depreciation

As at 1 July 2016 5,011 - 3,550 3,828 3,463 15,852

Charge for the year 2,973 - 2,655 2,445 4,125 12,199
Disposals - - (1) - (5) (5)
As at 30 June 2017 7,984 - 6,204 6,273 7,584 28,045

As at 1 July 2017 7,984 - 6,204 6,273 7,584 28,045

Charge for the year 3,708 238 4,514 3,340 4,586 16,385
Disposals - (1) - - (1)
As at 30 June 2018 11,692 238 10,717 9,613 12,169 44,429

Net book value

As at 1 July 2016 23,824 9,989 18,229 25,116 77,158
As at 30 June 2017 28,477 18,020 23,703 24,223 94,424
As at 30 June 2018 28,795 17,786 25,637 20,556 124,210
72 ANNUAL REPORT 2017/18

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

30 June 2018 30 June 2017 1 July 2016

Birr'000 Birr'000 Birr'000
21 Assets held for sale

Balance as at the beginning of the year -

   

    
 
      

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Transfer from property, plant and equipment 8,725 -

Disposals -
Fair value gain/(loss) on assets held for sale

Balance at the end of the year 8,725 - -

Enat bank took over collateral of some customers and these were recorded in the books as Assets classified as held for
sale as the Bank had no intention to make use of the property for administrative use. Management initiated a plan to
dispose of these assets to willing buyers and expects to have completed the transaction before the end of the next
financial period.

These assets have been valued by in-house engineers responsible for collateral valuation using the market approach
determined using Level 3 inputs.

There is no cumulative income or expenses in OCI relating to assets held for sale.

30 June 2018 30 June 2017 1 July 2016

Birr'000 Birr'000 Birr'000
22 Deposits from customers

Demand deposits 884,277 700,951 564,590

Savings deposits 2,138,144 1,353,290 951,457
Time deposits 1,953,984 1,708,646 903,697
Retentions payable on letters of credit 114,121 89,121 80,070

5,090,526 3,852,008 2,499,814

 ANNUAL REPORT 2017/18 73

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

30 June 2018 30 June 2017 1 July 2016

Birr'000 Birr'000 Birr'000
23 Other liabilities

Financial liabilities
   

   

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Unearned Income 14,796 31,382 47,831

Audit fee 184 98 75
-
14,980 31,480 47,906

Non-financial liabilities

Other payable 95,565 58,453 55,431

Blocked current account 2,122 1,952 1,982
Tax payable 1,984 1,191 965
Sales tax on interest paid 928 752 339
VAT Payable 383 - -
Dividend payable 503 505 638
Defined contribution liabilities 857 600 414
Payable to withdrawing shareholders - 903 943
Witholding tax payable 185 98 63
Graduate Tax 41
Incoming 205 Payable 57
Capital gain tax 4
Director fees payable - 1,100 -
Leave days accrual 9,727 6,398 3,591
Stamp duty payables 1,610 324 835
Borrowing 17,077
-
131,043 72,276 65,201

Gross amount 146,023 103,756 113,107

Maturity analysis 30 June 2018 30 June 2017 1 July 2016

Birr'000 Birr'000 Birr'000

Current 128,946 103,756 113,107

Non-Current 17,077
146,023 103,756 113,107
74 ANNUAL REPORT 2017/18

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

30 June 2018 30 June 2017 1 July 2016

Birr'000 Birr'000 Birr'000
24 Defined benefit liability

Defined benefits liabilities:

Severance pay
   

   

3 4

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Note 26(a) 6,380 2,549 1,820

Liability in the statement of financial position 6,380 2,549 1,820

Income statement charge included in personnel expenses:

Severance costs Note 26(a) 1,011 859 1,820

Total defined benefit expenses 1,011 859 1,820

Remeasurements for:
Remeasurement (gains)/losses Note 26(a) (2,926) 130 -
Deferred tax (liability)/asset on
remeasurement gain or loss 878 (39)
` (2,048) 91 -

The income statement charge included within personnel expenses includes current service cost, interest cost, past
service costs on the defined benefit schemes.

Maturity analysis 30 June 2018 30 June 2017 1 July 2016

Birr'000 Birr'000 Birr'000

Current
Non-Current 6,380 2,549 1,820

6,380 2,549 1,820

24a Severance pay

The Bank operates an unfunded severance pay plan for its employees who have served the Bank for 5 years and above
and are below the retirement age (i.e. has not met the requirement to access the pension fund). The final pay-out is
determined by reference to current benefit’s level (monthly salary) and number of years in service and is calculated as 1
month salary for the first year in employment plus 1/3 of monthly salary for each subsequent in employment to a
maximum of 12 months final monthly salary.

Below are the details of movements and amounts recognised in the financial statements:

30 June 2018 30 June 2017 1 July 2016

Birr'000 Birr'000 Birr'000

A Liability recognised in the financial position 6,380 2,549 1,820

30 June 2018 30 June 2017 1 July 2016

B Amount recognised in the profit or loss Birr'000 Birr'000 Birr'000

Current service cost 574 524 -

Interest cost 437 335 -

1,011 859 -
 ANNUAL REPORT 2017/18 75

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

24 Retirement benefit obligations (Contd)

C Amount recognised in other comprehensive income:

Remeasurement (gains)/losses arising from changes in
demographic assumptions - -
Remeasurement (gains)/losses arising from changes in the

   

   

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financial assumptions 1,956 (505) -

Remeasurement (gains)/losses arising from loss experience 970 375 -

2,926 (130) -

The movement in the defined benefit obligation over the years is as follows:

30 June 2018 30 June 2017 1 July 2016

Birr'000 Birr'000 Birr'000

At the beginning of the year 2,549 1,820 -

Current service cost 574 524 1,820
Interest cost 437 335
Remeasurement (gains)/ losses 2,926 (130)
Benefits paid -106 -

At the end of the year 6,380 2,549 1,820

The significant actuarial assumptions were as follows:

i) Financial Assumption Long term Average

30 June 2018 30 June 2017 1 July 2016
Birr'000 Birr'000 Birr'000
Discount rate (p.a) 12.68% 14.25% 14.30%
Long term salary Increase rate (p.a) 12.00% 9.70% 11.60%

ii) Mortality in Service

The rate of mortality assumed for employees are those according to the British A49/52 ultimate table published by the
Institute of Actuaries of England. These rates combined are approximately summarized as follows:
Age Mortality rate
Male Female

20-24 0.31% 0.22%

25-29 0.30% 0.23%
30-34 0.36% 0.31%
35-39 0.41% 0.28%
40-44 0.52% 0.32%
45-49 0.45% 0.43%
50-54 0.63% 0.63%
55-59 0.98% 0.98%
60-64 1.54% 1.54%
76 ANNUAL REPORT 2017/18

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements
24 Retirement benefit obligations (Contd)
iii) Withdrawal from Service

The withdrawal rates are as summarised below :

Age Resignation rates per annum

   

    
 
      

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Less than 20 0.00%

21-25 5.40%
26-30 2.91%
31-35 3.43%
36-40 4.51%
41-45 5.17%
Above 41

The sensitivity of the overall defined benefit liability to changes in the weighted principal assumption is:

Impact on defined benefit obligation

30 June 2018 30 June 2017
Change in Impact of an Impact of a Impact of an Impact of a
assumption increase decrease increase decrease
Birr'000 Birr'000 Birr'000 Birr'000

Discount rate 1%
Pension Increase rate 1%

The above sensitivity analysis is based on a change in an assumption while holding all other assumptions constant. In
practice, this is unlikely to occur and changes in some of the assumptions may be correlated. When calculating the
sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the
defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been
applied as when calculating the pension liability recognised within the statement of financial position.

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years. The
average duration of the severance pay plan at the end of the reporting period is 2.78 years

30 June 2018 30 June 2017 1 July 2016

Birr'000 Birr'000 Birr'000
25 Ordinary share capital

Authorised:
Ordinary shares of Birr 1000 each 971,011 763,917 565,130

Issued and fully paid:

Ordinary shares of Birr 1,000 each 971,011 763,917 565,130

Earnings per share

Basic earnings per share (EPS) is calculated by dividing the profit after taxation by the weighted average number of ordinary shares
in issue during the year.
30 June 2018 30 June 2017
Birr'000 Birr'000

Profit attributable to shareholders 158,875 112,203

Weighted average number of ordinary shares in issue 865 670

Basic & diluted earnings per share (Birr) 184 168

 ANNUAL REPORT 2017/18 77

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements
30 June 2018 30 June 2017
Birr'000 Birr'000
26 Retained earnings
At the beginning of the year 38,887 32,250
Transfer to regulatory reserve (14,114)
Profit/ (Loss) for the year 158,875 112,203
Transfer to legal reserve

   

   

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(39,719) (24,948)
Transfer to special reserve (3,322) (2,907)
Transfer to regulatory reserve (9,837) (7,354)
Dividend provided for (71,380) (56,243)
Directors share on profit (1,100)

At the end of the year 72,404 38,887

30 June 2018 30 June 2017

Birr'000 Birr'000
27 Legal reserve

At the beginning of the year 65,165 40,217

Transfer from profit or loss 39,719 24,948

At the end of the year 104,884 65,165

The NBE Directive No. SBB/4/95 states requires the Bank to transfer annually 25% of its annual net profit to its legal
reserve account until such account equals its capital. When the legal reserve account equals the capital of the Bank, the
amount to be transferred to the legal reserve account will be 10% (ten percent) of the annual net profit.

30 June 2018 30 June 2017

Birr'000 Birr'000
28 Regulatory risk reserve

At the beginning of the year 21,468 14,114

Transfer (from) / to retained earnings 9,837 7,354

At the end of the year 31,305 21,468

The Regulatory risk reserve is a non-distributable reserves required by the regulations of the National Bank of
Ethiopia(NBE) to be kept for impairment losses on loans and receivables in excess of IFRS charge as derived using the
incurred loss model.

Where the loan loss impairment determined using the National Bank of Ethiopia (NBE) guidelines is higher than the
loan loss impairment determined using the incurred loss model under IFRS, the difference is transferred to regulatory
risk reserve and it is non-distributable to the owners of the Bank.

Where the loan loss impairment determined using the National Bank of Ethiopia (NBE) guidelines is less than the loan
loss impairment determined using the incurred loss model under IFRS, the difference is transferred from regulatory
risk reserve to the retained earning to the extent of the non-distributable reserve previously recognised.

30 June 2018 30 June 2017

Birr'000 Birr'000
29 Special reserve

At the beginning of the year 5,923 3,016

Transfer (from) / to retained earnings 3,322 2,907

At the end of the year 9,245 5,923

78 ANNUAL REPORT 2017/18

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

30 June 2018 30 June 2017

Notes Birr'000 Birr'000
30 Cash generated from operating activities

Profit before tax
   

   

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216,524 146,510

Adjustments for non-cash items:

Depreciation of property, plant and equipment 20 16,385 12,199
Amortisation of intangible assets 19 5,691 5,690
Gain/(Loss) on disposal of property, plant and equipment 20 - -
Impairment on loans and receivables 15 5,128 11,102
Retirement benefit liability 24 1,011 859
Severance paid 24 (106) -
Net gain on foreign exchange 8 (10,142) (17,014)

Changes in working capital:

-Decrease/ (Increase) in loans and advances to customers 15 (868,595) (841,100)
-Decrease/ (Increase) in other assets 18 (79,090) (23,318)
-Increase/ (Decrease) in other liabilities 23 43,369 (9,218)
-Increase/ (Decrease) in deposits from customers 22 1,238,518 1,352,194

568,695 637,904

In the statement of cash flows, profit on sale of property, plant and equipment (PPE) comprise:
30 June 2018 30 June 2017
Birr'000 Birr'000

Proceeds on disposal - 12
Net book value of property, plant
and equipment disposed (Note - (12)

Gain/(loss) on sale of property, plant and equipment - -

 ANNUAL REPORT 2017/18 79

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements
31 Related party transactions

A number of transactions were entered into with related parties in the normal course of business. These are
disclosed below:
30 June 2018 30 June 2017 1 July 2016
Birr'000 Birr'000 Birr'000
31a Transactions with related parties

   

    
 
      

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Loans disbursed to :
Vice president - Operations 4,252 1,118 1,299
Vice President - Corporate services 2,350 226

4,252 3,468 1,525

31b Key management compensation

Key management has been determined to be the members of the Board of Directors and the Executive
Management of the Bank. The compensation paid or payable to key management for is shown. There were no
sales or purchase of goods and services between the Bank and key management personnel as at 30 June 2018.

30 June 2018 30 June 2017 1 July 2016

Birr'000 Birr'000 Birr'000

Salaries and other short-term employee benefits 2,509 2,496 2,136

Post-employment benefits 176 216 177
Termination benefits - -
Sitting allowance (Representation Allowance) 156 156 156
Other expenses (Provident fund contribution) 48 39 32

2,685 2,712 2,312

Compensation of the Bank's key management personnel includes salaries, non-cash benefits and contributions to
the post-employment defined benefits plans.

32 Directors and employees

i) The average number of persons (excluding directors) employed by the Bank during the year was as follows:

30 June 2018 30 June 2017 1 July 2016

Number Number Number

Professionals and High Level Supervisors 63 62 50

Semi-professional, Administrative and Clerical 411 305 204
Technician and Skilled 21 30 20

495 397 274

ii) The table below shows the number of employees (excluding directors), who earned over Birr 10,000 as
emoluments in the year and were within the bands stated.

30 June 2018 30 June 2017 1 July 2016

Birr'000 Birr'000 Birr'000

10,000 - 30,000 208 120 84

30,001 - 50,000 5 8 7
50,001 - 100,000 3 2 -
Above 100,000 - - -

216 130 91
80 ANNUAL REPORT 2017/18

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements
33 Contingent liabilities

33a Claims and litigation

The Bank has no contingent liabilities as at the date of this report. (30 June 2017: nil , 1 July 2016: nil).

33b Guarantees and letters of credit

   

   

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The Bank conducts business involving performance bonds and guarantees. These instruments are given as a
security to support the performance of a customer to third parties. As the Bank will only be required to
meet these obligations in the event of the customer's default, the cash requirements of these instruments are
expected to be considerably below their nominal amounts.

The table below summarises the fair value amount of contingent liabilities for the account of customers:

30 June 2018 30 June 2017 1 July 2016

Birr'000 Birr'000 Birr'000

Performance guarantees 2,122,436.00 1,285,140 1,145,811

Letters of credit 223,077.00 232,039 184,222

2,345,513.00 1,517,179 1,330,033

34 Commitments
The Bank has commitments, not provided for in these financial statements being unutilised facilities and
approved loans not disbursed.
30 June 2018 30 June 2017 1 July 2016
Birr'000 Birr'000 Birr'000

Loans approved but not disbursed 211,801 99,665

Unutilized facilities 156252 118,340 94,752

156252 330,140 194,416

35 Operating lease commitments - Bank as lessee

The Bank leases various properties under non-cancellable operating lease agreements. The lease terms are
between one and five years, and majority of these lease agreements are renewable at the end of the each lease
period at market rate.
The future aggregate minimum lease payments under non-cancellable operating leases are as follows:

30 June 2018 30 June 2017 1 July 2016

Birr'000 Birr'000 Birr'000

Not later than 1 year 49,229.00 7,322 13,215.67

Later than 1 years but not later than 5 years 74,875.00 61,326 44,819
Later than 5 years - 2,298
-
Total 124,104.00 68,648 60,333

36 Events after reporting period

In the opinion of the Directors, there were no significant post balance sheet events which could have a material
effect on the state of affairs of the Bank as at 30 June 2018 and on the profit for the period ended on that date,
which have not been adequately provided for or disclosed.
 ANNUAL REPORT 2017/18 81

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

37 First-time adoption of IFRS for the Bank

These financial statements, for the year ended 30 June 2018, are the first the Bank has prepared in accordance with International Financial
Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

For periods up to and including the year ended 30 June 2017, the Bank prepared its financial statements in accordance with its accounting
framework. Accordingly, the Bank has prepared financial statements which comply with IFRS applicable for periods ending on or after 30

   

   

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June 2018, together with the comparative period data as at and for the year ended 30 June 2017, as described in the summary of significant
accounting policies.

In preparing these financial statements, the Bank’s opening statement of financial position was prepared as at 1 July 2016, the Bank’s date
of transition to IFRS. This note explains the principal adjustments made by the Bank in restating its financial statements prepared under
the previous framework, including the statement of financial position as at 1 July 2016 and the financial statements as at and for the year
ended 30 June 2017.

In preparing its opening IFRS statement of financial position, the Bank has adjusted amounts reported previously in financial statements
prepared in accordance with Generally Accepted Accounting Principles (GAAP) of Ethiopia and the Commercial code of 1960. An
explanation of how the transition from GAAP to IFRS has affected the Bank's financial position, financial performance and cash flows is set
out in the following tables and the notes that accompany the tables.

The most significant IFRS impact for the Bank resulted from the implementation of IAS 39 Financial Instruments: Recognition and
Measurement which requires the bank to classify its financial instruments into available for sale, fair value through profit and loss, loans
and receivables and held to maturity. Also the impairment of financial assets only in cases where there is objective evidence of impairment
as a result of one or more loss events that occurred after the initial recognition of the asset (referred to as an "incurred loss" model).

In preparing these financial statements in accordance with IFRS 1, the Bank has applied the mandatory exceptions from full retrospective
application of IFRS. The optional exemptions from full retrospective application selected by the Bank are summarised below.

Exemptions applied

IFRS 1 allows first-time adopters certain exemptions from the retrospective application of certain requirements under IFRS. Following from
the principles underpinning IFRS 1, the Bank has applied the following exemptions:

(a) Deemed cost for property, plant and equipment and intangible assets

Property, plant and equipment and intangible assets were carried in the statement of financial position prepared in accordance with
previous framework using historical cost. The Bank has elected to regard those values as deemed cost at the transition date as carrying value
of assets under GAAP and IFRS is not expected to be materially different.

(b) Leases

Banks are required to determine whether an arrangement contains a lease based on the facts and circumstances existing on 1 July 2016. Any
contracts that exist would result in a classification based on the facts and circumstances that exist at transition date.
82 ANNUAL REPORT 2017/18

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

Exemptions applied (Contd)

(c ) Designation of Previously Recognised Financial Instruments

Applying this exemption means that Banks is permitted to designate a financial asset as available-for-sale at the date of transition to IFRS.
The Bank has designated unquoted equity instruments held at 1 July 2016 as available-for-sale investments.

   

    
 
      

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(d) Fair value measurement of financial instruments at initial recognition

Banks may apply the requirements to recognise day 1 gain or loss prospectively to transactions entered into on or after the date of transition
to IFRS. This will result in no gain or loss being recognised on the initial recognition of a financial asset or financial liability held prior to 1
July 2016.

Exceptions applied
(a) Estimates

Estimates made in accordance with IFRSs at the date of transition to IFRSs should be consistent with estimates made for the same date in
accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that
those estimates were in error or where application of previous framework did not require estimation such as post-employment benefits.

(b) De-recognition of financial assets and financial liabilities

This exception exempts a first time adopter from full retrospective application of the de-recognition rules in IAS 39, ‘Financial instruments:
Recognition and measurement’, for all financial assets and liabilities derecognised before 1 January 2004 or transition date. Therefore,
financial assets and liabilities derecognised before 1 July 2016 are not re-recognised under IFRS.
 ANNUAL REPORT 2017/18 83

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

37a Reconciliation of Statement of total comprehensive income for the year ended 30 June 2017

GAAP Reclassification Remeasurement IFRS as at 30

June 2017
Notes Birr'000 Birr'000 Birr'000 Birr'000

   

    
 
      

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Interest income A 298,582 - 4,862 303,444

Interest expense (200,676) - - (200,676)

Net interest income 97,906 - 4,862 102,768

Fee and commission income B 151,511 - 16,769 168,280

Fee and commission expense - - - -

Net fees and commission 151,511 - 16,769 168,280

income

Other operating income C 49,491 - (368) 49,123

Total operating income 298,908 - 21,263 320,171

Loan impairment charge D (15,710) - 4,608 (11,102)

Impairment losses on other assets - - - -

Net operating income 283,198 - 25,871 309,069

Personnel expenses E (70,849) (11,600) (82,449)

Amortisation of intangible assets F (8,126) - 2,436 (5,690)
Depreciation and impairment of G (13,200) 1,001 (12,199)
property, plant and equipment
Other operating expenses H (62,355) - 134 (62,221)

Profit before tax 128,668 - 17,842 146,510

Income tax expense I (28,877) - (5,430) (34,307)

Profit after tax 99,791 - 12,412 112,203

Other comprehensive income (OCI) net on income tax

Items that will not be subsequently reclassified into profit or loss:

Remeasurement gain/(loss) on J - 130 130

retirement benefits obligations
J - (39) (39)
Deferred tax (liability)/asset on
remeasurement gain or loss
- - 91 91

Total comprehensive income for the period 99,791 - 12,503 112,294

84 ANNUAL REPORT 2017/18

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

37b Reconciliation of equity as at 30 June 2017

IFRS as at 30
GAAP Reclassification Remeasurement June 2017
Notes Birr'000 Birr'000 Birr'000 Birr'000

   

    
 
      

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ASSETS

Cash and balances with banks 1,085,418 - - 1,085,418

Loans and receivables K 2,440,970 - 9,514 2,450,484
Investment securities: L 972,067 14,771 (22) 986,816
Other assets M 238,573 (18,741) (4,422) 233,253
Intangible assets N 24,276 - 1,002 25,278
Property, plant and equipment O 86,978 3,970 3,476 94,424
Deferred tax assets - -

Total assets 4,848,282 - 9,548 4,875,673

LIABILITIES
Deposits from customers P 3,770,173 81,835 - 3,852,008
Current tax liabilities Q 27,229 - (12,122) 15,107
Other liabilities R 135,800 (81,835) 49,790 103,755
Retirement benefit obligations S - - 2,549 2,549
Deferred tax liabilities T 6,250 - 554 6,804

Total liabilities 3,939,452 - 40,771 3,980,223

EQUITY

Share capital 763,917 - - 763,917

Retained earnings U 73,826 - (32,194) 41,632
Legal reserve 65,165 - - 65,165
Regulatory risk reserve V - - 18,722 18,722
Special reserve 5,923 - - 5,923
Other reserves W - - 91 91

908,831 - (13,381) 895,450

Total equity and liabilities 4,848,283 - 27,390 4,875,673

 ANNUAL REPORT 2017/18 85

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

37c Reconciliation of equity as at 1 July 2016

IFRS as at 1
GAAP Reclassification Remeasurement July 2016
Notes Birr'000 Birr'000 Birr'000 Birr'000
ASSETS
   

   

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Cash and balances with banks 767,434 - - 767,434

Loans and receivables K 1,615,515 - 4,972 1,620,487
Investment securities: L 554,550 8,083 26 562,659
Other assets M 210,995 (10,315) 9,256 209,935
Intangible assets N 27,244 - (1,433) 25,811
Property, plant and equipment O 72,453 2,231 2,474 77,158
Currents tax assets Q - - -
Deferred tax assets - - - -

Total assets 3,248,191 - 15,295 3,263,484

LIABILITIES
Deposits from customers P 2,469,342 30,472 - 2,499,814
Current tax liabilities Q 20,565 - (17,473) 3,092
Other liabilities R 87,185 (30,472) 56,394 113,107
Retirement benefit liability S - - 1,820 1,820
Deferred tax liabilities T 4,603 - 435 5,038

Total liabilities 2,581,695 - 41,176 2,622,871

EQUITY
Share capital 565,130 - - 565,130
Retained earnings U 58,133 - (39,997) 18,136
Legal reserve 40,217 - - 40,217
Regulatory risk reserve V - - 14,114 14,114
Special reserve 3,016 3,016
Other reserves W - - - -

666,496 - (25,883) 640,613

Total equity and liabilities 3,248,191 - 15,293 3,263,484

86 ANNUAL REPORT 2017/18

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

38 Notes to the reconciliation of equity as at 1 July 2016 and 30 June 2017 and total comprehensive income for the year
ended 30 June 2017.

A Interest income 30 June 2017

Birr'000

Interest and similar income under GAAP 298,582

Remeasurement adjustment :

   

    
 
      

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2 !  @ @  @$@ ( @ @$
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To recognise suspended Interest on non performing loans and advances 3,924

To recognise amortised costs on staff loans 778
To recognise amortised costs on women loans 208
To recognise amortised costs on NBE bills (48)
4,862

303,444

B Fee and commission income 30 June 2017

Birr'000

Fees and commission income under GAAP 151,511

Remeasurement adjustment :
To recognised unearned LC Commission (320)
To recognised unearned guarantee fees 17,089
16,769

168,280

C Other operating income 30 June 2017

Birr'000

Other operating income under GAAP 49,491

Remeasurement adjustment :
To recognise amortisation of loans estimation fees (48)
To recognised unearned LC Service Charge (320)
(368)

49,123

D Loan impairment charge 30 June 2017

Birr'000

Loan impairment charge under GAAP (15,710)

Remeasurement adjustment :
To adjust loan impairment in line with IFRS requirements 4,608
(11,102)

E Personnel expenses 30 June 2017

Birr'000

Personnel expense under GAAP (70,849)

Remeasurement adjustment :
To recognise severance benefit costs (859)
To recognise amortisation of cumulative prepaid employee benefit (615)
To recognise staff bonus expense in the period incurred (7,319)
To recognise leave pay expense in the period incurred (2,807)
(11,600)

(82,449)
 ANNUAL REPORT 2017/18 87

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements
F Amortisation of intangible assets 30 June 2017
Birr'000

Amortisation charge under GAAP (8,126)

Remeasurement adjustment :
To correct amortization charge on intangible assets overstated in line with IFRS 2,436
(5,690)

G Depreciation and impairment of property, plant and equipment

   

   

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30 June 2017
Birr'000

Depreciation charge on PPE under GAAP (13,200)

Remeasurement adjustment :
To correct depreciation charge overstated - Furniture and fittings 14
To correct depreciation charge understated - Office equipment (1,048)
To correct depreciation charge understated - Computer equipment (1,219)
To correct depreciation charge overstated - Motor vehicle 3,254
1,001

(12,199)

H Other operating expenses 30 June 2017

Birr'000

Other operating expense under GAAP (62,355)

Remeasurement adjustment :
To recognise amortisation of prepaid women loans expense (147)
To accrue for miscallenous expenses in the period 281
(62,221)

I Income tax expense 30 June 2017

Birr'000

Income tax expense under GAAP (28,877)

Remeasurement adjustment :
To current tax adjustment (3,703)
To book deferred tax adjustment (1,727)
(5,430)

(34,307)

J Remeasurement gain/(loss) on retirement benefits obligations 30 June 2017

Birr'000

Remeasurement gain/(loss) on retirement benefits obligations under GAAP -

Remeasurement adjustment :
To book Remeasurement gain/(loss) on retirement benefits obligations through OCI 130
Deferred tax (liability)/asset on remeasurement gain or loss (39)
91

K Loans and receivables 30 June 2017 1 July 2016

Birr'000 Birr'000

Loans and receivables under previous GAAP 2,440,970 1,615,515

Remeasurement adjustment :
4,608 14,114
To recognise interest on women loans computed using market interest rate ( Note A ) 208 5
To recognise women loan at amortised cost (439) (13)
To recognise interest on staff loans computed using market interest rate ( Note A ) 778 569
To recognise staff loan at amortised cost (4,488) (9,643)
To recognise suspended Interest on non performing loans and advances 3,924 -
To amortise unearned fee and commissions (49) (60)
Roll over adjustment from prior period 4,972 -

9,514 4,972

Loans and advances to customers per IFRS 2,450,484 1,620,487

88 ANNUAL REPORT 2017/18

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements
Under previous GAAP, Interest on non-performing loans is placed on non-accrual basis and maintained in either a memorandum account
(off-balance sheet) or in a contra interest receivable account, in the form of suspended interest until cash or its equivalent is received. All
suspended interest was reclassified to be included in the carrying amount of the financial assets giving rise to it.

Under previous GAAP, accrued interest on loans and advances to customers was recognised separately in other assets. These amount have
been reclassified the related loans and advances.

The principal and interest impairment provision on loans and advances to customers was classified separately under previous GAAP. The
impairment provision relating to the principal amount was recognised as part of loans and advances. On the other hand, the impairment on

   

    
 
      

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the interest portion was recognised as part of provision for other assets. Under IFRS, the impairment provision for the interest element of
loans and receivables has been reclassified to loans and receivables. These reclassification has been considered in determining IAS 39
provisions as is therefore included in the total remeasurement adjustment for Impairment provision on loans and advances to customers.

30 June 2017 1 July 2016

L Investment securities Birr'000 Birr'000

Investment securities under previous GAAP 972,067 554,550

Reclassification
To reclassifiy accrued interest from other assets to form part of the carrying amount of the NBE bills 14,771 8,083

Remeasurement adjustment :
To recognise amortised cost on NBE bills (48) 26
Roll over adjustment from prior period 26
(22) 26

Investment securities per IFRS 986,816 562,659

Under the previous framework, interest on NBE bill was included in other assets. Under IFRS, the interest has been reclassified to the
carrying value of the NBE bills.

The adjustment on treasury bills relates to the recognition of these securities at amortised costs using the effective interest method.

30 June 2017 1 July 2016

M Other assets Birr'000 Birr'000

Other assets as per previous GAAP 238,573 210,995

Reclassification :
Reclassification of accrued interest on NBE bill from other assets (14,771) (8,084)
Reclassification of fixed assets in store to property plant and equipment (3,970) (2,231)
Reclassification beween furniture stock account and other stock Accounts -

Remeasurement adjustment :
To recognise staff loans at fair value 4,488 9,643
To recognise women loans at fair value 439 13
To amortise women loan prepaid asset benefit (147) (3)
To amortise staff loan prepaid asset benefit (615) (397)
Roll over adjustment from prior period 9,256

13,421 9,256

Other assets per IFRS 233,253 209,936

Under previous GAAP, interest receivable on placement with banks was recognised separately as part of other assets. Under IFRS, the
interest receivable has been reclassified to the related asset.

Impairment provision on loans and advances to customers under previous GAAP was calculated separately on the outstanding principal
amount and outstanding interest amount. The impairment provision on outstanding interest receivable on these loans and receivables to
customers was recognised as part of provisions for other assets. The provision has been reclassified as part of loans and receivables.
 ANNUAL REPORT 2017/18 89

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements
30 June 2017 1 July 2016
N Intangible assets Birr'000 Birr'000

Intangible assets as per previous GAAP 24,276 27,244

Remeasurement adjustment :
To correct amortization charge on intangible assets overstated in line with IFRS 1,234 555
To correct amortization charge on intangible assets/Soft ware/ overstated in line with IFRS
To reverse amortisation charged on deferred establishment cost

   

   

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8 3,977
To expense deferred establishment costs not qualified for capitalization - (5,965)
Reversal of overstated amortization expense on deferred asset 1,193
Roll over adjustment from prior period (1,433)
1,002 (1,433)

Intangible assets per IFRS 25,278 25,811

30 June 2017 1 July 2016

O Property , plant and equipment Birr'000 Birr'000

Property, plant and equipment as per previous GAAP 86,978 72,453

Reclassification :
Reclassification of fixed assets in store to property plant and equipment 3,970 2,231

Remeasurement adjustment :
To correct depreciation charge understated - Furniture and fittings - (73)
To correct depreciation charge overstated - Furniture and fittings 15 -
To correct depreciation charge understated - Office equipment (1,048) (1,733)
To correct depreciation charge understated - Computer equipment (1,219) (1,076)
To correct depreciation charge overstated - Motor vehicle 3,254 5,356
Roll over adjustment from prior period 2,474
3,476 2,474

Property plant, and equipment per IFRS 94,424 77,158

30 June 2017 1 July 2016

Birr'000 Birr'000
P Deposits from customers
Deposits from customers under previous GAAP 3,770,173 2,469,342
Reclassification :
Reclassification adjustment - Accrued interest on deposits from Other liabilities 81,835 30,472

Deposits from customers per IFRS 3,852,008 2,499,814

Under the previous GAAP, interest accrued on interest bearing customer deposits were recognises separately as part of other liabilities.
Under IFRS, interest payable is included in the carrying amount of the financial liability giving rise to it. All interest payable was
reclassified to be included in the carrying amount of the financial liabilities giving rise to it.

30 June 2017 1 July 2016

Birr'000 Birr'000
Q Current tax (asset) / liability
Current tax as per GAAP 27,229 20,565

Remeasurement adjustment :
To adjust for current tax payable due to IFRS adjustments 5,351 (17,473)
Roll over adjustment from prior period (17,473)
(12,122) (17,473)

Current tax per IFRS 15,107 3,092

90 ANNUAL REPORT 2017/18

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements
30 June 2017 1 July 2016
R Other liabilities Birr'000 Birr'000

Other liabilities as per previous GAAP 135,800 87,185

Reclassification :
Reclassification adjustment - Accrued interest on deposits from Other liabilities ( Note P ) (81,835) (30,472)
Remeasurement adjustment :
To amortise guarantee commission and recognise unearned commission income

   

   

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(17,089) 43,023
To amortise LC service charge and recognise unearned income
 

320 2,404
To amortise LC commission and recognise unearned commission income 320 2,404
To accrue for staff bonus 7,319 3,275
To accrue for staff leave days balance 2,807 3,591
To accrue for miscallenous expenses in the period (281) 1,697
Roll over adjustment from prior period 56,394
49,790 56,394

Other liabilities per IFRS 103,755 113,107

S Retirement benefit liability Birr'000 Birr'000

Retirement benefit obligation under previous GAAP - -

Remeasurement adjustment :
To recognise defined benefit obligation arising from severance pay plan 859 1820
To book Remeasurement gain/(loss) on retirement benefits obligations (130) -
Roll over adjustment from prior period 1,820
2,549 1,820
Retirement benefit liability per IFRS 2,549 1,820

30 June 2017 1 July 2016

T Deferred tax Birr'000 Birr'000

Deferred tax as per GAAP 6,250 4,603

Remeasurement adjustment :
To adjust for deferred tax due to IFRS adjustments 80 435
To adjust deffered tax attributed to remeasurement gain / loss on defined benefit liability 39
Roll over adjustment from prior period 435
554 435

Deferred tax per IFRS 6,804 5,038

30 June 2017 1 July 2016

U Retained earnings Birr'000 Birr'000

Retained earnings as per previous GAAP 73,826 58,133

Remeasurement adjustment :
To correct amortization charge on intangible assets overstated in line with IFRS 2,436 555
To reverse amortisation charged on deferred establishment cost - 3,977
To expense deferred establishment costs not qualified for capitalization - (5,965)
To correct depreciation charge understated - Furniture and fittings - (74)
To correct depreciation charge overstated - Furniture and fittings 14 -
To correct depreciation charge understated - Office equipment (1,048) (1,733)
To correct depreciation charge understated - Computer equipment (1,219) (1,076)
To correct depreciation charge overstated - Motor vehicle 3,254 5,356
To recognise amortised cost on NBE bills (48) 26
To amortise Loan estimation fees and book unearned income (48) (60)
To amortise guarantee commission and recognise unearned commission income 17,089 (43,023)
To amortise LC service charge and recognise unearned income (320) (2,404)
To amortise LC commission and recognise unearned commission income (320) (2,404)
To recognise staff bonus expense in the period incurred (7,319) (3,275)
To recognise leave pay expense in the period incurred (2,807) (3,591)
To reversal of accrual for miscallenous expenses 281
To amortise women loan prepaid asset benefit 208 (3)
To amortise staff loan prepaid asset benefit 778 (397)
To recognise interest on women loans computed using market interest rate (147) 5
 ANNUAL REPORT 2017/18 91

Enat Bank Share Company

IFRS financial statements
For the period ended 30 June 2018
Notes to the financial statements

To recognise interest on staff loans computed using market interest rate ( (615) 569
To recognise suspended Interest on non performing loans and advances 3,924 -
To recognise defined benefit obligation expense arising from severance pay plan (859) (1,820)
To adjust impairment of loans and advances as per provisions of IFRS 4,608 14,114
To adjust expense which needs to be accrued (1,698)
To adjust for current tax payable due to IFRS adjustments (5,351) 17,473
To adjust for defferred tax due to IFRS adjustments

   

   

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Roll over adjustment from prior period (39,997) -

(32,194) (39,997)

Retained earnings per IFRS 41,632 18,136

30 June 2017 1 July 2016

V Regulatory risk reserve Birr'000 Birr'000

Regulatory risk reserve as per previous GAAP - -

Remeasurement adjustment :
Impairment allowance on loans and advances to customers (Note J) 4,608 14,114
Roll over adjustment from prior period 14,114
18,722 14,114

Regulatory risk reserve per IFRS 18,722 14,114

As per industry best practice , the (surplus) /deficit of the NBE guidelines on impairment provision and IFRS requirement is recognised in
other reserve. In the case of the bank management has created a regulatory risk reserve.

W Other reserves Birr'000 Birr'000

Other reserves under previous GAAP - -

Remeasurement adjustment :
To book remeasurement gain/(loss) on retirement benefits liability 130 -
Deferred tax (liability)/asset on remeasurement gain or loss (39)
Other reserves as per IFRS 91 -
92 ANNUAL REPORT 2017/18
 ANNUAL REPORT 2017/18 93

እናት ባንክ አክሲዮን ማህበር

የትርፍ እና ኪሳራ መግለጫ
ሰኔ 23 ቀን 2010 ላለቀው ዓመት

30 June 2018 30 June 2017

Notes Birr'000 Birr'000

ከወለድ የተገኘ ገቢ 5 489,608 303,444

የወለድ ወጪ 6 (312,143) (200,676)

የተጣራ የወለድ ገቢ 177,465 102,768

ከአገልግሎት እና ከኮሚሽን የተገኘ ገቢ 7 185,463 168,280

የአገልግሎት እና የኮሚሽን ወጪ 7 - -

የተጠጣራ ከአገልግሎት እና ከኮሚሽን የተገኘ ገቢ 185,463 168,280

ልዩ ልዩ ገቢዎች 8 76,190 49,123

ጠቅላላ የአገልግሎት ገቢ 439,118 320,171

ለአጠራጣሪ ብድሮች መጠባበቂያ 9 (5,128) (11,102)

ለሌሎች አጠራጣሪ ተሰብሳቢዎች መጠባበቂያ 10 - -

የተጣራ የአገለልገግለሎተት ገቢ 433,990 309,069

የሰራተኛ ወጪዎች 11 (118,196) (82,449)

ህልወታዊ ግዝፈት የሌላቸው ቅናሽ 19 (5,690) (5,690)
ከቋሚ ንብረት የተዯረገ የዕርጅና ቅናሽ 20 (16,385) (12,199)
ለሌሎች ወጪዎች 12 (77,193) (62,221)

ትርፍ ከግብር በፊት 216,524 146,510

የግብር ወጪ 13 (57,649) (34,307)

ትርፍ ከግብር በኋላ 158,875 112,203

ተጨማሪ ገቢዎች ተገቢው የግብር ዕዳ ከተቀነሰ በኋላ

በቀጣይነት ወዯ ትርፍ እና ኪሳራ መግለጫ የማይዞሩ

በሰራተኞች ጥቅማ ጥቅም ላይ በተሰላ የድጋሚ ልኬት የተገኘ ገቢ 24 (2,926) 130

ወይም ወጪ
13 878 (39)
በድጋሚ ልኬቱ ላይ የተገኘ የዘገየ የታክስ ሃብት ወይም ዕዳ

(2,048) 91

የባንኩ የተጣራ ትርፍ 156,826 112,294

ባለአክሲዮኖች በአንድ አክሲዮን የሚያገኙት ትርፍ 184 168

Running for a cause! “Girls & women economic empowerment ”

94 ANNUAL REPORT 2017/18

ማን እንደ እናት!

ENAT BANK
 ANNUAL REPORT 2017/18 95

የቦርድ ሰብሳቢ መልዕክት

ሐና ጥላሁን
የቦርድ ሰብሳቢ
እውን ለማድረግ በጥልቀትና በስፋት በመንቀሳቀስ ላይ
ይገኛል፡፡ ለአብነትም ሴቶች በተሻለ መልኩ የባንኩ
አገልግሎት ተጠቃሚ እንዲሆኑ ለማድረግ ዓለምአቀፍ
ፋይናንስ ኮርፖሬሽን ከተሰኘ ድርጅት ጋር በመተባበር አዲስ
ስልትና ስትራቴጂ ለመንደፍ ስምምነት ላይ ደርሰናል፡፡
ይህ ጥናት ሲገባደድ በየትኛውም ደረጃ ያሉ የባንካችንን
አገልግሎት የሚፈልጉ ሴቶች ተጠቃሚ እንደሚሆኑ
በልበ-ሙሉነት መናገር እችላለሁ፡፡

በሌላም በኩል የባንካችን የተከፈለ ካፒታል ለተከታታይ

ዓመታት 60 በመቶው በሴቶች መያዙ እንዲሁም
ከአጠቃላይ ባለ አክሲዮኖች ውስጥ 65 በመቶው ዓመታዊ
ትርፍ ተከፋይ ሴቶች መሆናቸው ባንካችን ያስቀመጠውን
ግብ ከማሳካት አንፃር ሳያሰልስ እየተጋ መሆኑን ግልፅ
ያደርገዋል፡፡ ይሁን እንጂ ባለፈው የበጀት ዓመት ለሴቶች
የተለቀቀው የብድር መጠን በአጠቃላይ ከተለቀቀው ብድር
አንፃር ሲታይ ገና ብዙ ሥራ እንደሚቀረን አመላካች
ለተከበራችሁ ባለአክሲዮኖች ነው፡፡

የ
ባንካችንን የ2010 ዓ.ም. ዓመታዊ የሥራ አፈፃፀም ነባሩ የባንካችን ስትራተጄያዊ ዕቅድ ከወቅቱ ውጭአዊና
ሪፖርት በእኔና በዳይሬክተሮች ቦርድ ስም ሳቀርብ ከባንኩ ውስጣዊ ሁኔታ ጋር የተጣጣመ ለማድረግ
ከፍተኛ ክብርና ደስታ ይሰማኛል፡፡ የቀድሞው የፕሮጄክት ቢሮ ተዋቅሮ ክፍቶቶችን በመለየት፣ ከፍ
ቦርድ የሥራ ጊዜውን አገባድዶ አዲሱ ቦርድ ሥራውን ሲልም አዲስ ስትራቴጂያዊ ዕቅድ በመንደፍ፣ በአዲሱ
ከጀመረ እነሆ አምስት ወራትን አስቆጥሯል፡፡ በዚህ የበጀት ዓመት የተሻለ ውጤት ለማስመዝገብና አዳዲስ
አጭር ጊዜ ውስጥ ቦርዱ በቁጥር ብዙ ሊባሉ የሚችሉ የባንክ አገልግሎቶችን ለማስተዋወቅ ሥራዎች በመሠራት
ስብሰባዎችን በማካሄድ ከነባሩ ቦርድ የተረከባቸውን ላይ ይገኛሉ፡፡ ከዚህ አንፃር በሚቀጥለው የበጀት ዓመት
ሥራዎች ለማስቀጠልና እንዲሁም ሁሉም ሥራውን የሞባይል ፋይናንስ አገልግሎቶችን ማለትም በሞባይል
አውቆ ኃላፊነቱን የሚወጣበት ጥብቅ የሆነ ተዋረዳዊ ስልክ ገንዘብ የመቀበልና የመክፈል አገልግሎት ለመጀመር
አሠራር (Corporate Governance) እንዲሰፍን ጥረት የሚያስችሉ ቅድመ ሁኔታዎችን የምናገባድድ መሆኑን
አድርጓል፡፡ ስገልፅ በደስታ ነው፡፡

ምንም እንኳን ውጭአዊ ሁኔታዎች ያሳደሩት ተፅዕኖ በመጨረሻም መላው የባንካችን ሠራተኞች ላስመዘገቡት
ቀላል ነው ባይባልም፣ ጥረታችን ተሳክቶ ባንካችን ስኬት እንኳን ደስ አላችሁ ለማለት እወዳለሁ፡፡ እንዲሁም
ከምንጊዜውም በላይ አትራፊ ባንክ መሆኑን አረጋግጧል፡፡ ባለ አክሲዮኖቻችን በኛ ላይ ዕምነት በመጣል ገንዘባቸውን
በተለይ የብድር ጥራትን ለማስጠበቅ በተደረገ ሁለንተናዊ በባንካችን ላይ በማፍሰሳቸውና ለስኬታችን ትልቅ አስተዋፅዖ
ጥረት ከጠቅላላ ብድር ውስጥ የክፍያ ችግር ያለባቸው በማድረጋቸው ምስጋናዬ የላቀ ነው፡፡ በተጨማሪም ባንካችን
ብድሮች ተነፃፃሪ ምጣኔ እጅግ አነስተኛ ከመሆኑም የመልካም አስተዳደር መስፈርቶችን፣ ሌሎች ተጓዳኝ
በላይ ብሔራዊ ባንክ ካስቀመጠውም ሆነ ባንኩ መሸከም ህጎችንና ደንቦችን ጠብቆ እንዲሠራ ላገዘን ለብሔራዊ ባንክ
እችላለሁ ብሎ ካቀደው በታች መሆኑን ሳበስር በደስታ ምስጋናዬን ማቅረብ እፈልጋለሁ፡፡
ነው፡፡

የሴቶችን የኤኮኖሚ አቅም ከመደገፍ አንፃር ባንካችን ፈር አመሰግናለሁ

ቀዳጅ እንደ መሆኑ መጠን አሁንም ይህንኑ አላማውን የቦርድ ሰብሳቢ
96 ANNUAL REPORT 2017/18

የባንኩ ፕሬዚደንት መልዕክት

ወንድወሰን ተሾመ
ፕሬዚደንት
የተሠራው የተቀናጀ ሥራ ውጤት በማምጣቱ የክፍያ
እንከን ያለባቸው ብድሮች ተነፃፃሪ ምጣኔ ከሁለት በመቶ
በታች ሲሆን ይህ ብሔራዊ ባንክ ካስቀመጠውም ሆነ
ባንካችን ካስቀመጠው ዕቅድ አንፃር እጅግ አነስተኛ ነው፡፡

በአዲሱ የበጀት ዓመት ባንካችንን እንደ ድርጅት ለማሳደግና

ትርፋማነቱን ከፍ ለማድረግ ትልቅ ዕቅድ አቅደናል፡፡ አዳዲስና
ዘመናዊ የአሠራር ዘዴዎችን በመተግበር ያልደረስንባቸው
ገበያዎች ውስጥ ዘልቀን የምንገባበት የሥራ ዘመን ነው፡፡
በተለይ ክፍያን ለማቀላጠፍ የሚያግዙ በሞባይል ስልክ ገንዘብ
የማስተላለፍና የመቀበል እንዲሁም የውክልና ባንክ ሥራ
በመተግበር ለደንበኞቻችን ላቅ ያለ አገልግሎት የምንሰጥበትና
ለባለአክሲዮኖቻችን የተሻለ ትርፍ የምንከፍልበት የሥራ
ዘመን ለማድረግ ከምን ጊዜውም በላይ ዝግጁ ሆነናል፡፡
ከዚህም በላይ ከወለድ ነፃ አገልግሎት ሥራ ላይ በማዋል
አገልግሎታችን ለሁሉም ተደራሽ እንዲሆን የምናደርግበት
የበጀት ዓመት ነው፡፡

ይህን በሰፊው ያቀድነውን ሥራ ከዳር የሚያደርስልን

የሠለጠነ የሰው ኃይል በመሆኑ ለሰው ሀብት ልማት
ከፍተኛ በጀት መድበናል፡፡ ዘመናዊና ወቅታዊ የሆነ
ሥልጠናና የሰው ኃይል ልማት ሥራ ላይ በማዋል
ዕቅዳችን ሙሉ በሙሉ የምናሳካበት የበጀት ዓመት
ለማድረግ ሁለንተናዊ ጥረት በማድረግ ላይ እንገኛለን፡፡

በመጨረሻም ባንካችን ላስመዘግበው ስኬት ከፍተኛ

አስተዋፅኦ ላበረከቱ ለባንካችን ቦርድና ሠራተኞች፣

የ
2010 ዓ.ም የእናት ባንክ የሥራ አፈፃፀም ሪፖርት ጉድለታችን ሣይሆን ጠንካራ ግንኙታችን በመመልከትና
በባንካችን አስተዳደርና በራሴ ስም ሳቀርብ በታላቅ አንዳንድ ውጭአዊ ሁኔታዎች በባንካችን አገልግሎት
ክብር ነው፡፡ ባንካችን ሥራ ከጀመረ አምሰተኛ ላይ የሚያደርሱትን አሉታዊ ተፅኖዎች በመገንዘብና
የልደት በዓሉን አክብሯል፡፡ ዛሬም በራዕዩ የሰነቀውን ተስፋ ባለመቁረጥ ከኛ ጋር በመሥራት ለባንካችን ስኬት
ማህበራዊ ግዴታውንና የሥራ ተልዕኮውን በጉልህ ዋና አጋር ለነበሩ ውድ ደንበኞቻችን እንዲሁም ከባንካችን
እያሳካ ይገኛል ፡፡ ትልቅ የትርፍ ክፍያ ሣይጠብቁ ራዕያችንን ብቻ በመጋራት
ገንዘባቻውን በባንካችን ላይ ላፈሰሱ ውድ ባለአክሲኖቻችን
በበጀት ዓመቱ፣ ምንም እንኳን የተለያዩ ውጣ ውረዶች ታላቅ ምስጋናዬን ለማቅረብ እወዳለሁ፡፡ በተጨማሪም
ቢያጋጥሙንም፣ ጠቅላላ ገቢና ትርፍ ከዓምናው ለሥራችን መቃናት፣ ህግንና ደንብን አክብረን በደንበኞቻችን
ተመሳሳይ ወቅት ጋር ሲመዘን በተከታታይ የ45 ዘንድ ተዓማኒ ባንክ እንድንሆን በትልቁ ሲያግዘን ለነበረ
በመቶና የ47 በመቶ ብልጫ አላቸው፡፡ በሌላም በኩል ለብሔራዊ ባንክ ከፍ ያለ ምስጋናዬን አቀርባለሁ፡፡
ጠቅላላ ሀብት ብር 6.5 ቢሊዮን የደረሰ ሲሆን ከአምናው
ተመሣሣይ ወቅት ጋር ሲመዘን የ33 በመቶ ጭማሪ አመስግናለሁ፣ መጪው ጊዜ የስኬት እንዲሆን መልካም
አሣይቶአል፡፡ በተመሣሣይ መልኩ የተከፈለ ካፒታል ምኞቴን ለመግለፅ እወዳለሁ፡፡
971 ሚሊዮን የደረሰ ሲሆን ይህም ካምናው ተመሣሣይ
ወቅት አንፃር የ27 በመቶ ዕድገት አስመዝግቦአል፡
፡ የባንካችንን የሀብት ጥራት ከማስጠበቅ አንፃር
 ANNUAL REPORT 2017/18 97

1. ሴቶችን የሚያግዝ የዋስትና ይቻላል፡፡ ከምሠረታው ማግስት ጀምሮ ባንኩ ለተለያዩ

ሴት ነጋዴዎች ብድር የሰጠ ሲሆን ከዚህ ውስጥ ጥቂቶቹ
ፋይናንስ መላ ጀማሪዎች ሲሆኑ የተቀሩት በስራ ላይ የነበሩ ነገር ግን
ይህ መርሀግብር በስራ ፈጠራና በታታሪነታቸው ትርፋማ ተጨማሪ ስራ ማስኬጃ ገንዘብ የሚፈልጉ ነበሩ፡፡ ከዚህም
የሆነ ሥራ ላይ ተሰማርተው ነገር ግን ማስያዥያ የሚሆን በላይ የሥራ ፈጠራ ክህሎትን እና የስራ ዕቅድ አወጣጥ
ንብረት በማጣታቸው ብቻ የብድር ተጠቃሚ መሆን ችሎታን ለማሳደግ የሚያስችል የአቅም ግንባታ ስልጠና
ያልቻሉ ሴት ነጋዴዎችን ለማገዝ ተግባራዊ የተደረገ እንዲወስዱ አድርጓል፡፡ ይህን ሥልጠና ከወሰዱ ቦኋላ
መላ ነው፡፡ ዋነኛ ትኩረቱም ሴቶች ያሉባቸውን የዘመናዊ የሴቶች የመቆጠብ አቅም ከፍ ማለቱን በተግባር መመስከር
አሠራርና የፋይናንስ ችግሮችን በመለየት የፋይናንስ ችለናል፡፡ በ2010 ዓ.ም. በዚህ መርሐግብር ተጠቃሚ የሆኑ
አገልግሎት ለሴቶች በቀላሉ ተደራሽ ማድረግና ኢኮኖሚያዊ አምስት ተበዳሪዎች የወሰዱትን ብድር በተቀመጠላቸው ጊዜ
ችግራቸውም ደረጃ በደረጃ እንዲቀረፍ ማገዝ ነው፡፡ ውስጥ ሙሉ በሙሉ ከመክፈል አልፈው 81 አዳዲስ የስራ
እድል በመፍጠርና ንብረት በማፍራትም ረገድ ውጤታማ
እናት ባንክ ሴቶችን ማዕከል ያደረገ ባንክ እንደ መሆኑ መጠን ነበሩ፡፡ በአሁኑ ጊዜ ለዚህ መርሀግብር የተመደበ ገንዘብ
ከተለመደው አሠራር ወጣ ባለ መልኩ አገልግሎቱን ለሴቶች ብር 4.3 ሚሊዮን የደረሰ ሲሆን 15 የሚሆኑ የብድር
ተደራሽ በማድረግ ለፍትሀዊ የኢኮኖሚ ተጠቃሚነት እና ጥያቄዎች ለመጽደቅ በሂደት ላይ ይገኛሉ፡፡
የፆታ እኩልነት አስተዋፅዎ የሚያደርግ ባንክ ነው ማለት

እናት ባንክ ባለፈው በጀት ዓመት በድምሩ ብር 10 ሚሊዮን ያክል ብድር እሸትና ፒስ ለተሰኙ
ሁለት አነስተኛና ጥቃቅን ተቋማት (ለእያንዳንዳቸው ተጨማሪ ብር 5 ሚሊዮን) አበድሯል፡፡
ተቋማቱም ቀደም ብሎ ከባንኩ ጋር በተደረሰ ስምምነት መሠረት 958 ሴት ነጋዴዎችን የብድር
ተጠቃሚ ማድረግ ችለዋል፡፡

ከጥቃቅንና አነስተኛ ተቋማት ጋር ትስስር በመፍጠር የተወሰኑ ሴቶችን የብድር ተጠቃሚ

እያደረግን ነው፡፡ ምንም እንኳን ተደራሽነታችን ውስን ቢሆንም በዚህ መልኩ አነስተኛ ሥራ
ላይ ለተሰማሩ ሴቶችን የብድር ተጠቃሚ ማድረግ የአንድን ቤተሰብ ኤኮኖሚያዊ ችግር እንደ
መፍታት ይቆጠራል ብለን እንገምታለን፡፡

በሴቶች የንግድ ተቋማት ላይ እናት ባንክ በሊዲያ ህይወት ውስጥ ጠልቆ የገባው ድርጅቷ
መዋዕለ ንዋይ ማፍሰሳችን አስገራሚ እድገት በውጭ ገበያ ላይ ማምጣት በጀመረበት
ለወደፊቱ የተሻለ ነገን እንድንገነባ ወቅት ላይ ነው፡፡ የእናት ባንክ የሴቶች ፋይናንስ አገልግሎት
ረድቶናል፡፡ ክፍል ዳይሬክተር የሆኑት ወ/ሮ አበባ ተስፋየ እንደሚሉት
“ሊዲያ በወቅቱ ዘጠኝ ማሽኖች፣ ጥሬ ዕቃ ለመግዛት እና
ሊድያ ስታልመው የነበረውን እንደ ቀበቶና ቦርሳ ለስራ ማስኬጃ የሚሆን ብድር ትፈልግ ነበር”፡፡ ሊዳያ
የመሣሰሉትን የቆዳ ውጤቶችን ለገበያ ማቅረብ ስትወስን ድርጅቷን ከመሠረተች ሦስት ዓመት የሆናት ሲሆን
በመጠኑ ስጋት ነበራት፡፡ በወቅቱም በቼክ የሚንቀሳቀስ ሂሳብ ነበራት፡፡ ባለፉት
ሶስት አመታት ከእናት ባንክ የፋይናንስ አገልግሎት፣
“የመጀመሪያው የማምረቻ ድርጅቴ በጣም ትንሽ ነበር::”
የማማከርና ብድር ማግኘት ችላለች፡፡
በማለት ሊዲያ ትናገራለች፡፡“በሰው ሀይል የሚንቀሳቀሱ
አራት ማሽኖችና ሦስት ሰራተኛ ነበር የነበረን፤በቂ የሴቶች የዋስትና የፋይናንስ መላ ለድርጅቷ
ሰራተኛ አልነበረኝም፤ ነገር ግን የንግድ ስራዬ እያደገ እንደሚጠቅማት ገለፃ ከተደረገላት በኋላ ብድር ለማግኘት
መጣ፤በጣም ስፈራ ነበር እና እንደማንኛውም አነስተኛ መሟላት የሚገባቸውን ቅድመ ሁኔታዎች በማሟላት የብር
ንግድ ስራ የሚያጋጥሙኝን ችግሮች እንደምቋቋማቸውና 300,000.00 የብድር ጥያቄ አቀረበች፡፡ ስልጠናው በጣም
እንደምወጣቸው እርግጠኛ አልነበርኩም፡፡“ ጠንክሮ መስራት፣ ቆራጥነት እና ጊዜ ይጠይቅ እነደነበር
እና በስተመጨረሻም ውጤታማ እንደሆነች ሊዲያ
ሊዲያ ለሴቶች ለዋስትና የሚውል ፋይናንስ መርሀግብር
ትናገራለች፤ብድሯም ፀደቀላት፡፡ የአውሮፓ ህብረት እና
ከጓደኞቿ ሰምታ ነበር፤ ነገር ግን ባንክ ያለመያዣ ንብረት
ኢንተር አፍሪካ ንግድ ገበያ የመሳሰሉ የዓለም ዓቀፍ የገበያ
ብድር ይሰጣል ብላ አላመነችም ነበር፡፡የሴቶች ብድር
እድል ያገኘችባቸው ሲሆኑ የተፋጠነ የሴቶችን የኢኮኖሚ
አገልግሎት ባለሙያን ለማግኘትና እገዛ ለመጠየቅ ወደ
እናት ባንክ መጥታ ነበር፡፡
 98 ANNUAL REPORT 2017/18

አቅም የማሳደግ ማዕከል እና የአፍሪካ ሴት ስራ ፈጣሪዎች ከፍተዋል፡፡ ይህ የፋይናንስ ትምህርት የባንካችን ደንበኛ
የተባሉ ፕሮግራሞችም አባል ሆነች፡፡ ከዚህ በመቀጠልም ላልሆኑትም ጭምር የሚሰጥ ሲሆን ሥልጠናውን የወሰዱ
JICA (ጃይካ) ከተባለ ድርጅት ተጨማሪ 18 የተለያዩ ሴቶች እንደየ አቅራቢያቸው ከሌሎች ባንኮች ጋር ደንበኝነት
ማሽኖች በእርዳታ መልክ ለማግኘት ችላለች፡፡ ለተቸገሩ ሣይመስረቱ አልቀሩም፡፡ ሆኖም ከሥልጠናው ቦኋላ
ሕፃናትና ሴቶች ስልጠና ከሚሰጡ ድርጅቶች 19 ወጣት ደንበኝነታቸውን ከእናት ባንክ ጋር ያደረጉ ሴቶች በየጊዜው
ሴቶችን በመቀበል አሰልጥና ቀጥራለች፡፡ በተጨማሪም ወቅቱን የጠበቁ የፋይናንስ መረጃዎች ስለሚቀርቡላቸው
ስራን ለማሳደግ በሚረዳ የስልጠና ፕሮግራም ውስጥ በቁጠባም ሆነ በንግድ ሥራቸው መሻሻሎችን እያሳዩ
አባል በመሆን በአዳዲስ ምርቶች(ውጤቶች) ጥናትና ነው ፡፡ ይህ መርሀግብር የፋይናንስ አቅሙን ለማሳደግ
ምርምር ላይ ትኩረቷን የበለጠ ማድረግ ጀመረች፤ እናም ለሚፈልግ ለማንኛውም ዜጋ በተለይም ለአዲስ ስራ
የስራ ስልቷንና እቅዷን በማሻሻል ከለሰች፡፡ ሊዲያ የቆዳ ጀማሪ ወጣቶች ወይም የቁጠባ ክህሎታቸውን ከፍ
ውጤቶች ማምረቻ ድርጅት በአሁኑ ሰዓት 19 ሰራተኞችና ለማድረግ ለሚፈልጉ ሁሉ በጣም መቃሚ ነዉ፡፡
30 ማሽኖች ሲኖሩት የብር 3 ሚሊዮን ካፒታል ለማፍራት
ችሏል፡፡ ስራውም ከነበረበት አነስተኛ የስራ ደረጃ በማደግ
አሁን ከእናት ባንክ የሴቶች ፋይናንስ ፕሮግራም ወጥቷል
እንደ ዜጋ ድርጅታዊ ኃፊነትን
፤ለሊዲያ መጪው ጊዜ አስደናቂና ስኬታማ ይሆናል
መወጣት አንፃር የተፈፀሙ
ማለት ይቻላል፡፡ ተግባራት

ፋይናንስ ነክ ያልሆኑ ሥልጠናዎችን • የምንሰጠዉ አገልግሎት አካታችነትን

የመደገፍና በጎ ስራዎችን መስጠትን
በመስጠት የሴቶችን አቅም ማጎልበት
ይጨምራል፡፡
• ፋይናንስ ነክ ያልሆኑ ሥልጠናዎች
በ2009/10 ባንካችን ዕገዛ ለሚያስፈልጋቸዉን ማህበረሰቦችና
ይህ ሥልጠና በአነስተኛና መካከለኛ ደረጃ ላይ ያሉ ሴት ድርጅቶች ወደ አንድ ሚሊዮን ብር የሚጠጋ ገንዘብ ወጭ
ስራ ፈጣሪዎች የሚያጋጥሟቸዉን ኢኮኖሚያዊ ችግሮች በማድረግ እርዳታና ድጋፍ በመስጠት የበኩሉን አስተዋጽኦ
ለማቃለል የምንሰጠዉ ፋይናንስ ነክ ያልሆነ የሥልጠና አድርጓል፡፡ ከነዚህም መካከል መቄዶንያ የአዛዉንቶችና
ዓይነት ነዉ፡፡ ከእነዚህ መካከል የስራ ፈጠራ ክህሎት የአዕምሮ ህሙማን መርጃ ማዕከል፣ የኩላሊት እጥበት
ለማጎልበት፣የገበያ ትስስር ለመፍጠርና ገበያን ተደራሽ ድርጅት እና ቼሻየር ሰርቪስስ ኢትዮጽያ ድርጅቶች
ለማድረግ የሚያስችሉ መላዎችን ለመንደፍ የሚያስችሉ ተጠቃሽ ናቸዉ፡፡ በተጨማሪም ባንካችን በድጋፍ ዙሪያ
ሥልጠናዎች ይገኙበታል፡፡ በጎ ሃሳቢ ሁሉ የሚሳተፍበት ለተሰናዱ ለሶስት ዝግጅቶች ድጋፍ አድርጓል፡፡ እነዚም
የሆነ ዜጋ ሁሉ የሚሳተፍበት ዋስትና ማቅረብ ለማይችሉ ግሪን ላይፍ ‹‹እማ›› በሚል ለተዘጋጀዉ የእናቶች ጤና
ሴቶች እንደ ዋስትና የሚያገለግል ገንዘብ የሚሰባሰብበት ዝግጅት፣የኢትዮጽያ ዲፕሎማቲክ ሚስቶች ያዘጋጁት
ቋት ማስተዋወቃችን ከተለያየ ማህበረሰብ ጋር አብረን ዲፕሎማቲክ ባዛር እና ለአለምአቀፍ ሴቶች ዝግጅቶች
በጋራ እንድንሠራ አግዞናል፡፡ እንደዚህ ዓይነት አቃፊ ናቸዉ፡፡ የመጀመሪያዉ ዝግጅት ዓላማ የነበረዉ በማህበረሰቡ
ሽርክናዎች መገንባት መቻል የነጋዴ ሴቶችን አቅም ዉስጥ ለእናቶች እና ለወደፊቶቹ እናቶች የጤና ግንዛቤ
ከማጎልበትም አልፎ ለደንበኞቻችንና ለባለአክሲዮኖቻችን ለመፍጠርና ለማስጨበጥ ነበር፡፡ በተጨማሪም በእናቶች
ተጨማሪ ዕሴት ለመፍጠር ያስችለናል፡፡ ቀን ላይ ባንኩ ለእናቶችና በጎዳና ላይ በችርቻሮ ንግድ ላይ
ለተሰማሩ ሴቶች የባንኩ አርማ ያለበትን ዣንጥላ በስጦታ
የገንዘብ አጠቃቀም ሥልጠና መልክ አከፋፍሏል፡፡
• የሴቶችን ህይወት ለማሻሻል ይረዳ ዘንድ
የገንዘብ አጠቃቀም ሥልጠና ያለ ምንም
ክፍያ እንሰጣለን
የገንዘብ አጠቃቀም ፅንሰ ሃሳብን ለማስረፅ ቀላል የሆኑ
የትምህርት መርጃ መሳሪያዎችንና ቪዲዮዎችን በመጠቀም
በግልና በቤተሰብ ደረጃ የገንዘብ አጠቃቀም ሥልጠና
ይሰጣል፡፡ ይህ ሥልጠና ሴቶች የገንዘብ አጠቃቀም
አማራጮችን በደንብ አንዲረዱና በልበ ሙሉነት ዉሳኔ
እንዲወስኑ አቅማቸውን ያጎለብታል፡፡ በ2009/10 ለአስራ
ሶስት ተቋማት በተሰጠዉ የፋይናንስ ትምህርት ዕድል
914 ሠራተኞች የተሳተፉበት ሲሆን ከነዚህ ውስጥ ስላሳ
በመቶዎቹ (30%) የእናት ባንክ የሴቶች ቁጠባ ሒሳብ
 ANNUAL REPORT 2017/18 99

እናት ባንክ አክሲዮን ማህበር

እናት
የትርፍባንክ አክሲዮን
እና ኪሳራ መግለጫ ማህበር
የትርፍ
ሰኔ 23 እና ኪሳራ
ቀን 2010 መግለጫ
ላለቀው ዓመት
ሰኔ 23 ቀን 2010 ዓ.ም ላለቀው ዓመት
30 June 2018 30 June 2017
Notes Birr'000 Birr'000

ከወለድ የተገኘ ገቢ 5 489,608 303,444

የወለድ ወጪ 6 (312,143) (200,676)

የተጣራ የወለድ ገቢ 177,465 102,768

ከአገልግሎት እና ከኮሚሽን የተገኘ ገቢ 7 185,463 168,280

የአገልግሎት እና የኮሚሽን ወጪ 7 - -

የተጠጣራ ከአገልግሎት እና ከኮሚሽን የተገኘ ገቢ 185,463 168,280

ልዩ ልዩ ገቢዎች 8 76,190 49,123

ጠቅላላ የአገልግሎት ገቢ 439,118 320,171

ለአጠራጣሪ ብድሮች መጠባበቂያ 9 (5,128) (11,102)

ለሌሎች አጠራጣሪ ተሰብሳቢዎች መጠባበቂያ 10 - -

የተጣራ የአገለልገግለሎተት ገቢ 433,990 309,069

የሰራተኛ ወጪዎች 11 (118,196) (82,449)

ህልወታዊ ግዝፈት የሌላቸው ቅናሽ 19 (5,690) (5,690)
ከቋሚ ንብረት የተዯረገ የዕርጅና ቅናሽ 20 (16,385) (12,199)
ለሌሎች ወጪዎች 12 (77,193) (62,221)

ትርፍ ከግብር በፊት 216,524 146,510

የግብር ወጪ 13 (57,649) (34,307)

ትርፍ ከግብር በኋላ 158,875 112,203

ተጨማሪ ገቢዎች ተገቢው የግብር ዕዳ ከተቀነሰ በኋላ

በቀጣይነት ወዯ ትርፍ እና ኪሳራ መግለጫ የማይዞሩ

በሰራተኞች ጥቅማ ጥቅም ላይ በተሰላ የድጋሚ ልኬት የተገኘ ገቢ 24 (2,926) 130

ወይም ወጪ
13 878 (39)
በድጋሚ ልኬቱ ላይ የተገኘ የዘገየ የታክስ ሃብት ወይም ዕዳ

(2,048) 91

የባንኩ የተጣራ ትርፍ 156,826 112,294

ባለአክሲዮኖች በአንድ አክሲዮን የሚያገኙት ትርፍ 184 168

100 ANNUAL REPORT 2017/18

እናት ባንክ አ.ማ

እናት ባንክ አክሲዮን ማህበር
የሃብትና
ሰኔ 23 ቀንዕዳ መግለጫ
2010 ዓ.ም ላለቀው ዓመት
ሰኔየሃብት
23 እናቀንዕዳ2010
መግለጫ ዓ.ም ላለቀው ዓመት

2,010 2,009 2,008

ማብራሪያ ብር ብር ብር
ሃብት

በእጅ ያለ ገንዘብ እና በባንክ ያለ ተቀማጭ 14 1,307,717 1,085,418 767,434

ብድር እና ሌሎች ተሰብሳቢዎች 15 3,313,951 2,450,484 1,620,487
ኢንቨስትመንት
-ባንኩ በሌሎች ድርጅቶች ያለው የአክሲዮን ድርሻ 17 15,902 15,270 15,270
- ብድር እና ተሰብሳቢ/የኢትዮጵያ ብሄራዊ ባንክ ሰነድ ግዢ 17 1,379,940 971,546 547,389
ለሌሎች ሃብቶች 18 312,343 233,253 209,935
ህልወታዊ ግዝፈት የሌላቸው ንብረቶች 19 19,587 25,278 25,811
ቋሚ ንብረቶች 20 124,210 94,424 77,158
በዓመቱ ተሰብሳቢ ግብር 13 - - -
ወደፊት የሚሰበሰብ ግብር 13 - -
የተወረሱ ንብረቶች 21 8,725 - -

ጠቅላላ ሃብት 6,482,374 4,875,673 3,263,484

#######

ዕዳ

የደንበኞች ተቀማጭ ገንዘብ 22 5,090,526 3,852,008 2,499,814

የግብር ዕዳ 13 35,998 15,106 3,092
ሌሎች ዕዳዎች 23 147,123 103,756 113,107
የሠራተኞች አገልግሎት ክፍያ ዕዳ 24 6,380 2,549 1,820
ወደፊት የሚከፈል የግብር ዕዳ 13 15,455 6,804 5,038

ጠቅላላ ዕዳ 5,295,482 3,980,223 2,622,871

ካፒታል እና መጠባበቂያ

የተከፈለ ካፒታል 25 971,011 763,917 565,130

ያልተከፈለ ትርፍ 26 72,404 38,887 18,136
ህጋዊ የመጠባቂያ
ለብሄራዊ ሂሳብ መጠባበቂያ የሂሳብ ልዩነት የተያዘ
ባንክ የብድር 27 104,884 65,165 40,217
ለኢትዮጵያ
መጠባቂያቤሄራዊ ባንክ መጠባበቂያ 28 31,305 21,468 14,114
ለልዩ የመጠባበቂያ ሂሳብ 29 9,245 5,923 3,016
ለሌሎች የመጠባበቂያ ሂሳብ 24 (1,957) 91 -

ጠቅላላ ካፒታል እና መጠባበቂያ 1,186,892 895,450 640,613

ጠቅላላ ዕዳ እና ካፒታል 6,482,374 4,875,673 3,263,484

#######
 ANNUAL REPORT 2017/18 101
S/No Branch Name Address Phone Number
1 Etige Taitu Head Office (Kazanchis Enat Tower) +251 115 15 16 39
2 Nigist-Saba Bole Medhanealem (Beza Building) +251 116 18 04 61
3 Abebech Gobena Megenagna (Tamegas Building) +251 116 67 39 99
4 Derartu Tullu Mexico ([Link] Building) +251 115 57 25 36
5 Sindu Gebru Merkato (to the west of Tana Commercial Center) +251 112 73 23 01
6 Catherin Hamlin Meskel Flower (In front of Dandii boru School) +251 114 70 09 33
7 Sylvia Pankhurst Sengatera (Yobek Commercial. Center) +251 115 57 68 03
8 Shewareged Gedle Kality (Beside Shewa Bakery) +251 114 71 74 55
9 Yekake Wordwot Gojam Berenda (Beside Oil Libya) +251 112 73 27 35
+251 116 67 23 78/
10 Mulu Emebet Emiru Hayahulet (Beside Yohanes Kitfo)
+251 116 67 22 97
11 Fatuma Roba Furi (Jomo II In front of NOC) +251 118 12 28 36
12 Dinkinesh "Lucy" WenberTera (At the back of Amede Commercial Center) +251 112 73 47 17
+251 111 26 87 53/
13 Merry Armede Adisu Gebeya (Beside Tsion Hotel)
+251 111 26 85 67
14 Nigist Eleni Saris (Saris Addisu Sefer Solomon Building) +251 114 70 88 76
15 Dr. Jember Tefera Bole (Morning Star Mall) +251 118 33 34 76
16 Tsion Michael Andom Lideta (Lideta Condominium Delina tower) +251 115 57 90 12/13
+251 116 39 54 87/
17 Arbegna Kebedech Seyoum Gerji (Sunshine Compound)
+251 116 39 53 61
+251 114 71 18 06/
18 Sr. Zebider Zewde Lafto (In front of Southwest School)
+251 114 71 15 72
19 Prof. Yalemtsehay Mekonen Arat Kilo (Around Berhana Selam Printing) +251 111 26 38 84
20 Bizunesh Bekele Bethel (Beside Bethel Hospital) +251 113 69 73 38
21 Dr. Widad Kidanemariam Ayat (End of Railway Line) +251 116 39 04 19
22 Dr. Bogalech Gebre Imperial (Beside Zola International Hotel) +251 116 68 43 92
23 Emahoy Zemzem Gerbi Merkato Cinema Ras (Around Anwar Mosque) +251 112 73 54 82
24 Tirhas Mezgebe Gofa Sefer (Beside Down Town Hotel) +251 114 70 22 41
25 Shambel Sister Aster Ayana Akaki (Yeshi Total) +251 114 71 69 07
Emahoy Weletemariam
26 Yeka Abado (Around Meskelegna Road) +251 118 72 33 13
Gelaw
27 Hawassa Hawassa (Haik Building) +251 462 12 30 86
28 Mekele Mekele (Kedamay Weyane Sub City) +251 342 41 51 95/72
29 Bahir Dar Bahir Dar (Kebele 4 Beside Zemamnesh Building) +251 582 26 65 59
30 Dire Dawa Dire Dawa (Around Ruz Tera) +251 252 11 02 96
31 Adama Adama (Around Franko in front of BM cafe) +251 222 12 01 76
32 Shashemene Shashemene (Abosto Area Infront of Bekera Building ) +251 462 11 98 94
33 Adi-Haki AdiHaki (Mekele) +251 342 41 12 40
34 Legetafo Legetafo (Beside CCD Homes) +251 116 68 30 33
35 Adama Arada Adama (Around Arada Area) +251 222 11 48 55
36 Gonder Gonder (Awraris Building) +251 582 11 77 95/96
37 Shashemene (sub branch ) Shashemene (Asnakech & Belete Commercial Center) +251 462 11 14 39
38 Debre Berhan Debre Berhan (Nega Commercial Center) +251 116 37 63 88
+251 346 64 28 35/
39 Mekhoni Tigray (Haddish Abebe Building)
+251 346 64 76 55
40 Kuriftu Bishoftu (Kuriftu Resort) +251 114 30 86 24
102 ANNUAL REPORT 2017/18
“ዋናው ቁምነገር ገንዘብን እንዴት ማግኘት ማወቅ ሳይሆን
ANNUAL REPORT 2017/18 103

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