THE INSTITUTE OF FINANCE MANAGEMENT

FACULTY OF ECONOMICS & MANAGEMENT SCIENCE

DEPARTMENT OF ECONOMICS AND TAX MANAGEMENT
BACHELOR OF SCIENCE IN TAX MANAGEMENT
YEAR 2 SEMESTER I
2020/2021
AFU 07304: INTERMEDIATE FINANCIAL ACCOUNTING
GROUP ASSIGNMENT

GROUP MEMBERS
S/N STUDENT’S NAME REGISTRATION NUMBER
1. SARA E. KACHERI IMC/BTX/202150
2. WINIFRIDA GODLOVE MUNUO IMC/BTX/2021761
3. DAFROSA HONORI NDEMBIKO IMC/BTX/2020864
4. SECILIA A SAMMA IMC/BTX/2021148
5. MCHILO ALLY ABDALLAH IMC/BTX/2021089

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 DIRECTORS’ REPORT AS PER TFRS 1

CHAPTER ONE: INTRODUCTION

1.1 OBJECTIVE AND RATIONALE OF THE ASSIGNMENT

 To have clear understanding on the Directors’ Report and The Report by those charged
with Governance according to The Tanzania Financial Reporting Standards 1 (TFRS 1).
 To study and understand the Financial reports prepared by entities and have ability to
differentiate The Directors’ report of Public and Private Entities.
 Students to have ability to employ the studied concepts into the preparation of the
financial reports according to the standards set by the Board.

1.2 AN OVERVIEW OF THE SELECTED ENTITIES

The selected entities are;
1. Bank of Tanzania (BOT)
2. Jubilee holdings limited (JHL)

1. JUBILEE HOLDINGS LIMITED.

Jubilee Holdings limited was founded in 1937 and headquatered in Nairobi Kenya as a private
entity. Jubilee holdings limited consists of three sectors which are banks, finance and investment.

JHL as an investment holding company, underwrites life and non-life insurance risks associated
with death, health, disability, property and liability. It is also issues a portfolio of investment
contracts to provide asset management solutions for their savings and retirement needs. The
company offers its insurance products to business, individuals, and families.

As exlplained by the chairman that, jubilee has maintained its focus on building sustainable
insurance and asset management business based on sound underwriting, innovation and prudent
risk selection. This may lead to the increase of investors within the company.

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In addition, it is involved in the fund management and power generation activities as well as
provision of international fiber optic broadband cable connectivity services. The company has
operations in Kenya, Uganda, Tanzania, Burundi and Mauritius.

MISSION

To provide solutions that protects the future of our customers

VISION

Enabling people to overcome uncertainty

CORE VALUES

Teamwork, integrity, excellence and passion.

2. BANK OF TANZANIA (BOT)

The bank of Tanzania is a banker and fiscal agent to the government of united republic of
Tanzania and the revolutionary. The Bank of Tanzania implemented an accommodative monetary
policy to revitalize private sector credit growth, thereby reinforcing sustainable high growth momentum
of the economy. The policy stance was consistent with the objective of maintaining low inflation close to
the country’s medium-term target of 5.0 percent, and within the EAC and SADC convergence
benchmarks of utmost 8.0 percent and between 3.0 and 7.0 percent, respectively. The outcomes of
accommodative monetary policy included fast recovery of private sector credit growth and fall in
interest rates.

Also monetary policy will continue to focus on maintaining low inflation, ensure stability of the exchange
rate, and respond to economic conditions and policies in an endeavour to sustain the growth of the
economy. The Bank will also improve the functioning of the financial sector, among other intended
outcomes, to reduce credit interest rates and improve lending to the private sector. This includes
measures to improve payment systems in the process of digitization of the economy, as well as
spearheading financial inclusion initiatives and development of financial markets.

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MISSION

Maintain price stability and integrity of the financial system for inclusive economic growth

VISSION

To be a central bank that effectively fosters macro-economic stability and modernized financial
system in sustenance of country’s middle-income status and beyond

CORE VALUES

The bank embraces the following core values

Integrity

We exhibit high ethical and moral standards reflected by honesty, sincerity, truthfulness and
confidentiality in executing our mandate.

Excellence

We execute our duties professionally with creativity and innovativeness to improve

organizational performance

Accountability

We are collectively and individually accountable in discharging our responsibilities

Transparency

We clearly and openly execute our mandate and proactively communicate relevant information
to stakeholders

Inclusiveness

We value broad participation, teamwork and harnessing multiple skills and experiences in
discharging our duties.

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1.3 STRUCTURE OF THE ASSIGNMENT

This assignment has three chapters include;

i. Chapter one

This chapter mostly covers the introduction of the assignment. The introduction covers the
following;

 The objective and rationale of the assignment

 The overview of the selected entities
 It gives a nutshell what will be found in the entire assignment (Structure of the
assignment)

ii. Chapter two

This chapter mostly covers the Findings of the difference between Public and Private sector
directors’ report by considering the following;

 An overview of Public sector and Private sector

 Difference between directors’ report of Public sector and Private sector as per financial
statement of selected entities
 Difference between directors’ report of Public sector and Private sector as per TFRS 1.
 Entities compliance to TFRS 1
 Additional contents that are attached by entities in their reports that are not covered by
TFRS 1.
 Conclusion

iii. Chapter three

This chapter mainly covers the recommendations as follows;

 Recommendations to the NBAA

 Recommendations to the selected entities
 Recommendations to the course instructors

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  Recommendations to the Institute of Finance Management (IFM)

CHAPTER TWO: FINDINGS

2.1 DIFFERENCE BETWEEN PUBLIC AND PRIVATE

SECTOR DIRECTORS’ REPORT.

AN OVERVIEW OF PUBLIC SECTOR AND PRIVATE SECTOR

Public sector director’s report means political administrative

relationship that has thesigned to ensure greater accountabilityand a greater deligation of power t
o managers. Public sectorsdirectors report plays major roles in society and effectivegovernance, I
n the public sector that encourages the efficient useof resources, strengthen the accountability for
the stewardship ofthose resources, improve management and service delivery, andthere by contri
bute to improving people lives. Also effectivedirectors report and help to build a confidence in p
ublic entitieswhich is in itself necessary for public sectors to meet their objectives.

VISION OF PUBLIC SECTORS DIRECTORS REPORT

Is to ensure public services that works for, in support of national development

MISSION OF PUBLIC SECTOR DIRECTORS REPORT

The mission of public sector directors report is to create a learn performance
oriented, highly motivated and efficient publicservices that delivers high quality services
WHILE
Private sector director’s report means broadly speakingcorporate governance in which organizati
on are directedcontrolled and held to account and is underpinned by theprinciples of openness, in
tegrity, and accountability. Alsogovernance is concerned with structures and process for decision
making, accountability, control and behavior at the top oforganization, the aim of this report is to
avoid any possibleconfusion regarding the application of this study.

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VISION OF PRIVATE SECTOR DIRECTORS REPORT
The vision of private sector is to ensure that our unique networkis by the government and those i
n the public sector and privatesectors as the first choice for enterprise support delivery.
To ensure that we and our membership share a common ethosand values and we believe in the w
ork we do and passionate about it

To develop and maintain excellent working relationships with awide range of public sector and p
rivate sector partners, for thebenefit of our membership
To ensure that membership of enterprise support organizationsare in demand as credible, experie
nced enterprise supportdeliverers and continue to respond to the needs andcircumstances of their
local communities and economies.

Another vision is to ensure that network is independent,impartial and non partisan services netwo
rk and its membershipprovide are customer focused and of high quality
To ensure that the network and its membership are passionateabout enterprise support and it is fu
ndamental to all we do andtherefore to believe that in the results of enterprise supports willachie
ves and see the impact it makes
.
MISSION OF PRIVATE SECTOR DIRECTORS REPORT
The mission is to represent, unite and support all organizationsthat are passionate about inspiring
and encouraging enterprise

2.1.2 Difference between directors report of public sector and private sector TFRS1

Public sector entities prepare statements of service performance information as per TFRS1 while
private sector entities does not prepare the statement of services of performance information that
should be presented to primary users for decision making.

Presentation of Statement of service information will enable primary and shareholders

efficient and effectiveness of the entities services performance. SPI should provide link between
services performance objectives with respective in put output and outcome.

Statement of service performance information around two element which are

(a). Outcome, what the entity is seeking to achieve in terms of its impact in
society.

(b). Output; the goods or services that the entity delivry during the year.

Public sector entity require the statement of service performance to ;

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 (a) Describe the outcomes that the entities is seeking to achieve or influence through the
delivery of services the outcomes are likely closely related to the mission or purposes reported in
the entities information sector of the performance report.

The main difference is that the mission or purpose is usually stated in broad or general terms and
applies over the life of the entity. By contrast the description of outcomes in the statement of
service performance should be more specific and focus on what the entity is seeking to achieve
over short to medium term.

2.1.3 Difference between directors report of public sectors and private sectors as per
financial statements of selected entities.

ASSETS.
BANK OF TANZANIA
includes the following assets in preparation of financial report;
esrow accounts, Holding of Special Drawing Rights(SDRs),Quota in International Monetary
Fund(IMF)Advances to the Government and Retirement benefits assets.
WHILE,
JUBILEE COMPANY includes the following assets in preparation of financial report; Right of
use assets ,Investment in Associates ,Receivable arising out of direct insurance arrangements
,Receivable arising out of reinsurance arrangements and reinsures share of insurance contrance
liabilities which are not included in BANK OF TANZANIA financial report.

EQUITY(capital).
In case of capital BANK OF TANZANIA has Authorized and paid up share capital.
WHILE,
JUBILEE COMPANY has retained earnings, equity attributable to owners of the company,
share capital, proposed dividends and non-controlling interest.

LIABILITY(current liability).
In case of liability BANK OF TANZANIA
includes the following liability in preparation of financial report; Currency in circulation,
Deposits-Banks and non-bank financial institutions, Deposits governments, Foreign currency
financial liabilities poverty reductions and growth facility BOT liquidity paper ,retirement
benefit obligation, IMF related liabilities and allocation of Special Drawing Rights (SDRs).
WHILE,
JUBILEE COMPANY includes Lease liabilities, Investment contract liabilities , Insurance
contract liabilities , Dividend payable, Current income tax liability ,creditors arising out of direct

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arrangements and Creditors arising out of reinsurance arrangements which are not included in
BANK OF TANZANIA financial report.

2.2 ENTITIES COMPLIANCE WITH TFRS 1

2.2.1 AN OVERVIEW: SELECTED ENTITIES’ DIRECTORS
REPORTS AND DIRECTORS’ REPORT AS PER TFRS 1.

There will be a clear statement within the report by those charged with governance of compliance with
the provisions of this Standard and all other statutory legislations relevant to the entity.

JUBILEE HOLDINGS LIMITED DIRECTORS REPORT

It explains their performance on different aspects and challenges faced also explain on future
plans that they intended to accomplish. The following are the aspects or criterias
explained under this report

PRINCIPAL ACTIVITIES

The Company is an investment holding company. The Company, through its subsidiaries, provides a
wide range of property, liability, health and life insurance, retirement products, and broader financial
related services to customers in Kenya, Uganda, Tanzania, Burundi and Mauritius. It also owns
investment companies and financial advisory companies in Kenya, Uganda, Tanzania and Burundi.

DIVIDENDS

An interim dividend of Kes 1.00 per share amounting to Kes 72.473 million (2018: Kes 72.473 million)
was paid on 7 October 2019. The Directors recommend a final dividend of Kes 8.00 per share amounting
to Kes 579.784 million (2018: Kes 579.784 million). The total dividend for the year represents 180% of

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the issued share capital as at 31 December 2019 (2018: 180%). Further to guidance given by Capital
Markets Authority in Circular No. 4/2020 dated 16th April 2020 authorising Boards of issuers of
securities to the public to, where they deem appropriate, proceed to recommend, approve, declare and
pay dividends subject to, inter alia, ratification by shareholders at the next AGM, the final dividend will
be paid on or about 24th July 2020 to shareholders registered as at 30th June 2020

BUSINESS REVIEW

The following is the summary of the results for the year ended 31 December 2019

Additional details of the business overview are captured in the Chairman’s Statement on pages 10 to 13.

Risk Management The Group has developed an Enterprise Risk Management (ERM) framework to realize
opportunities, while reducing threats to an acceptable level through the implementation of adequate
controls. Through the ERM process decision makers, better understand business situations and how the
likely outcomes may affect the Group as a whole, enabling them options that are aligned with the
Group’s risk appetite or options that can be aligned through implementation of effective controls. Risk
Management (continued) Each entity within the Group has risk champions whose mandate is to
spearhead the implementation of risk management and reporting on risks. There also exist structures
for reporting the risk so that the Group’s Board is given assurance that risks are being defined and
managed at acceptable levels.

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BANK OF TANZANIA DIRECTORS REPORT

Bank of Tanzania Annual Report 2019/2020

1. INTRODUCTION

The Directors present this report together with the audited financial statements for the financial year
ended 30 June 2020, which disclose the state of financial affairs of the Bank of Tanzania (the “Bank,
BoT”). During the year, the Bank continued to implement its mandate as provided in the Bank of
Tanzania Act, 2006 to ensure sustainable national economic growth. The Bank carried out its mandate to
issue and distribute currency to the economy through its branch network and custody centres in some
parts of the country. During the year, the Bank operated six branches, a training institute and eleven
safe custody centres. Three safe custody centres in Iringa, Morogoro and Musoma regions were added
during the year. The Bank provided information and data on economic activities in the country which
included periodic economic reports to its stakeholders.

ESTABLISHMENT

The Bank of Tanzania was established under the Bank of Tanzania Act, 1965 which was repealed in 1995
and 2006. The Bank currently operates under the Bank of Tanzania Act, 2006.

BANK’S VISION The vision of the Bank is “attained macro-economic stability, modernized financial
system and expanded financial inclusion that supports Tanzania’s inclusive industrial economic growth.”

BANK’S MISSION The Bank’s mission is “To maintain price stability and integrity of the financial system
for inclusive economic growth”.

2. STATUTE AND PRINCIPAL ACTIVITIES

Bank of Tanzania is the Central Bank of the United Republic of Tanzania comprising Tanzania Mainland
and Zanzibar and is wholly owned by the Government of the United Republic of Tanzania. The Bank
discharged its obligations as provided in the Bank of Tanzania Act, 2006. Functions and objectives of the
Bank are to:

(a). Formulate, implement and be responsible for monetary policy, including foreign exchange rate
policy, issue currency, regulate and supervise banks and financial institutions including mortgage

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financing, development financing, lease financing, licensing and revocation of licenses and to deal, hold
and manage foreign exchange reserves of Tanzania;

(b). Compile, analyse and publish the monetary, financial, balance of payments statistics and other
statistics covering various sectors of the national economy; (c). Regulate, monitor and supervise the
payment, clearing and settlement systems;

(d). Act as a banker and fiscal agent of the Government of the United Republic of Tanzania and the
Revolutionary Government of Zanzibar (the “Governments”); and

(e). Ensure the integrity of the financial system, support the general economic policies of the
Government, and promote sound monetary, credit and banking conditions conducive to sustainable
development of the national economy.

3. RESOURCES AND STRENGTHS

The Bank possesses adequate resources and human capacity to implement its mandates as provided in
the Bank of Tanzania Act,2006. The Bank uses its human, financial and technological resources to
achieve its strategic objectives. The Bank has highly skilled, committed, motivated and competent staff
dedicated to a long-term career. Management adheres to good governance principals and promotes
good labour relations that provides conducive environment to discharge its mandates. The Bank has
adequate financial resources to perform its mandates. It develops Corporate Plan which identifies
strategic objectives to effectively direct resources and guide the performance. From its strategic
perspective, the Bank enhances its financial performance by improving management of its resources
through prioritisation of initiatives, implementing initiatives within the available financial resources to
generate adequate income to support its operations.

The Bank has been generating revenue that covered all operating expenses and other support provided
to stakeholders. This has enabled the Bank to discharge its mandates without seeking support from
shareholder. The profitable operations have helped the Bank to accumulate adequate reserves while
paying adequate return to its shareholder through dividend payments. On technological side, the Bank
has modernized its operations by adopting modern technology to improve its day-to-day operations.
Further, the Bank has strategically located branches and safe custody centres, which facilitate efficient
banking and currency services. In addition, the Bank has undertaken various reforms that contribute to
the attainment of its objectives. These include enhancing Bank’s operational and leadership capacity by

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instilling sound management practices, innovative human resource policies, building capacity in core
competencies, optimizing business processes, application of modern and secure technologies, and
acquisition of adequate resources for sustainable operational excellence. The Bank has also undertaken
on-going modernisation of the monetary policy framework and payment systems to improve efficiency
and effectiveness of the monetary policy implementation and reduce costs to customers thus improving
the financial services access.

4. REVIEW OF THE BANK’S PERFORMANCE

During the year, the Bank implemented its Strategic Plan for 2019/20 – 2020/21. The Plan was built on
three themes of Leadership, Innovation and Excellence. The Plan contained six strategic objectives that
were formulated to enhance achievement of the Bank’s statutory mandate as stipulated in the Bank of
Tanzania Act of 2006 of maintaining price stability and promoting stability of the financial system. The
Plan was also developed to support and facilitate attainment of broad Government macroeconomic
objectives. The Bank’s performance on accomplishment of its mission and vision based on strategic
objectives was as follows:

(a) Enhance Effectiveness of Monetary Policy. This entailed keeping monetary conditions consistent
with low and stable core inflation. The target was to attain and maintain a single digit and stable core
and headline inflation. The Bank had set the target to maintain core inflation not exceeding 5 percent
and headline inflation not exceeding 8.0 percent throughout the period. REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 30 JUNE 2020 (Continued) 54 Bank of Tanzania Annual Report 2019/20 4. Annual
inflation for all consumers’ goods and services excluding food and energy (core inflation) in June 2020
slowed down to 2.6 percent from 3.4 percent recorded in June 2019. Core inflation continued to be low
and stable, explained largely by stability in the value of Tanzanian Shilling against major currencies,
prudent monetary policy and fiscal consolidation. Headline inflation was 3.2 percent a slight decrease
from 3.7 percent recorded in June 2019 and remained below the medium target of 8.0 percent. The
objective also aimed at maintaining official foreign reserves sufficient to cover at least 4.0 months of
projected imports of goods and services. As at the end of June 2020, the Bank foreign official reserves
remained high and sufficient to cover 6.0 months of imports of goods and services, which is above 4.3
months recorded at the end of June 2019 and above the target of 4.0 months. The observed increase in
the level of official foreign reserves was mainly attributed to purchase of forex from the Inter-bank

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Foreign Exchange Market (IFEM) consistent with improved current account balance amidst
accommodative monetary policy.

(b) Enhance Stability, Safety and Inclusiveness of Financial Systems.

The Bank aimed at increasing access and usage of formal financial services. In this regard, the Bank
developed and implemented consumer protection framework; a system for registration of physical
financial access points and a system for accessing real-time data from banks and financial institutions.
Also, the Bank strengthened legal, regulatory and supervisory frameworks for ensuring resilient banking
system through alignment of the frameworks with best international standards and practices; and
adopted appropriate tools for monitoring resilience of the financial system. The number of adult
population accessing financial services through mobile phones has increased to 78.4 percent from 74.3
percent attained in March 2019. Further, the Bank of Tanzania (Consumer Protection) Framework and
Regulations, 2019 was developed to enhance consumer confidence. The Bank launched the Financial
Services Registry (FSR), which aims at mapping financial services access points in the country. FSR was
also launched to provide near real time information of geolocation of financial services access points.
The initiative was conducted in order to assist relevant stakeholders in allocation of financial service
access points within 5 kilometres. The Financial System Stability Index (FSSI) was -0.7 points as at the
end of June 2020 (June 2019: -0.6 points), which was within the band of -3 and +3 points; and Capital
Adequacy Ratio for banking sector was 16.9 percent surpassing the minimum regulatory requirement of
10.0 percent. The ratio of liquid assets to demand liabilities was 33.4 percent suggesting that, on
average there was insignificant liquidity risk in the banking sector. Non-performing Loans (NPLs) ratio
was 10.8 percent, which was above the acceptable target of not more than 5.0 percent. The increase in
NPLs was mainly a result of decline in repayment of loans caused by impact of COVID-19 to the
economy. It is expected that NPLs will be contained through the various regulatory measures instituted
by the Bank. Such measures included directing banks and financial institutions to: i. Implement non-
performing loans reduction strategies and report progress on quarterly basis for close monitoring; ii.
Improve credit-underwriting processes by using credit reference reports in loan application assessment
and granting process; iii. Enhancing loan recovery efforts; and iv. Adhering to the Tanzania Banker’s
Association Code of Conduct to, among others, enhance staff integrity. 55 Bank of Tanzania Annual
Report 2019/20

(c) Enhance Banking and Currency Services During the period the Bank continued to promote banking
and currency services that were safe, convenient, timely and affordable. Cheques and Electronic Fund

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Transfers were received and processed within the required time of not more than a day after receiving
(T + 1) and within a day (T + 0), respectively. The achievement was attributed to continuation of clearing
activities under the Tanzania Automated Clearing House (TACH) system and the Treasury Single Account
(TSA), which increased the use of electronic funds transfer (EFT) as settlement instrument in
Government payments. Whereas for currency services, the processing lag was one month for higher
denomination banknotes, which was within the target of one month. However, for lower denomination,
the processing lag was more than six months, which was above the set target of three months.

(d) Strengthen Institutional Capacity and Operational Efficiency This objective aimed at enhancing Bank’s
leadership capacity by instilling sound management practices, innovative human resource policies,
optimized business processes, modern and secure technologies, and acquisition of adequate resources
for sustainable operational excellence. The objective also aimed at enhancing stakeholders’ engagement
to improve their understanding, support, and feedback on the Bank’s undertakings. During the period
under review, the Bank conducted capacity-building programs on strategic thinking and planning to
Management and professional staff. It also enhanced monitoring and evaluation over implementation of
the strategic plan. The Bank launched a corporate-wide skills audit exercise to identify skills gaps that
need to be addressed in order to improve the Bank operational performance, thereby according staff
learning opportunities with a view to enhance their competences to execute the Bank’s core functions.
Also, the Bank continued to attract and retain highly skilled, committed, motivated, and competent
staff. The level of employee satisfaction with the work environment is expected to continue rising up as
per the Bank survey findings of July 2019 and March 2020. In addition, 40 (forty) level one end-to-end
business processes were identified as part of the process improvement initiatives. During the year
financial performance improved, where corporate expenditure coverage ratio stood at an average of 1.5
times (2019:1.4 times), signifying continued ability to generate revenue sufficient to cover expenditure
obligations The Bank enhanced stakeholders’ engagement as evidenced by the results of stakeholders’
perception Bank survey conducted in the first half of 2019/20. The survey indicated that 93.5 percent of
our stakeholders consider the image of the Bank to be good. In addition, the Bank continued with public
education programs by participating in various fora including Saba Saba and Nane Nane exhibitions to
disseminate information and provide public awareness on its operations in areas of roles and functions
of the Bank including awareness on the bank notes and coins handling and their respective security
features. Further, Information and Communication Technology (ICT) performance was impressive
whereby availability of the systems stood at an average of 98.0 percent for databases and at 98.8
percent for servers. The overall Bank’s ICT maturity level grew from level 2.0 to 3.0 based on the EVAL

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tool used by SADC central banks to evaluate IT maturity. REPORT OF THE DIRECTORS FOR THE YEAR
ENDED 30 JUNE 2020 (Continued) 56 Bank of Tanzania Annual Report 2019/20

(e) Enhance Good Governance The Bank strengthened corporate governance through effective risk
management and enhanced internal controls. The Bank identified and assessed the financial,
operational, strategic and reputational risks that can expose it to inefficiency. Overall, the Bank’s risk
exposure was ranked under yellow zone, which indicates moderate and tolerable level. The
achievement was attributed to implementation of risk mitigation strategies, risk reviews and awareness
sessions as well as compliance checks conducted by internal audits.

5. CORPORATE GOVERNANCE

Members of the Board of Directors other than the Governor and Deputy Governors are appointed by
the Minister for Finance of the United Republic of Tanzania, while the latter are appointed by the
President of the United Republic of Tanzania. The following Directors served in the Board during the
year.

In accordance with Section 9(2) (c) of the Bank of Tanzania Act, 2006, a representative of the Ministry of
Finance and Planning of the United Republic and Principal Secretary to the Treasury of the Revolutionary
Government of Zanzibar are ex-officio members. Bank of Tanzania ascribes to the highest standards of
corporate governance. The Bank through the Board of Directors and Management upholds and practices
the principles of sound corporate governance. To this end, the Bank of Tanzania Act, 2006, has provided
a framework for ensuring application of sound corporate governance principles and best practices by

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the Bank’s Board of Directors and its Committees and Management in the course of managing the day
to day affairs/operations of the Bank as summarised below:

(i) In terms of the provisions of Section 9(1) of the Bank of Tanzania Act, 2006, the Board of Directors of
the Bank is the supreme policy making body, and the approving authority of the corporate plan and
budget of the Bank;

(ii) Four Committees are currently assisting the Bank’s Board of Directors in the discharge of its
functions. These are the Monetary Policy Committee, Audit Committee, Banking Supervision Committee
and Finance and Investment Committee.

(a) Monetary Policy Committee The Monetary Policy Committee was established under the provision of
Section 12(1) of the Bank of Tanzania Act, 2006. Its membership comprises of the Governor as
Chairman, the Deputy Governors, and six Non-Executive Directors. The Monetary Policy Committee
assists the Board in the review of monetary policy targets; review of research papers and major
economic and monetary policy changes before adoption by the Board. The Committee’s mandate also
covers review of the Governments’ revenue and expenditure patterns; review of debt management
operations and statutory reports of the Bank related to implementation of monetary and financial
policies

(b) The Audit Committee Established under the provision of Section 12(1) of the Bank of
Tanzania Act 2006, the Audit Committee is largely composed of Non-Executive Directors. The
Chairman of the Committee is a Non-Executive Director. The Deputy Governor-Administration
and Internal Control is the only Executive member of the Committee. The Terms of Reference
for the Audit Committee cover four major areas, namely, Internal Control, Financial Reporting,
Internal Audit and External Audit. The Audit Committee’s mandate under Internal Control
covers evaluation of control environment and culture; the adequacy of the internal control
systems and compliance with International Financial Reporting Standards (“IFRS”) in the
preparation of financial statements; the overall effectiveness of the internal control and risk
management framework. The Committee also reviews Management requests for write off/ write
back of items from the books of accounts and reviews the effectiveness of the system for
monitoring compliance with laws and regulations. The mandate relating to financial reporting
requires the Audit Committee to review significant accounting and reporting issues and their
impact on the financial reports and ensure current financial risk areas are managed appropriately.
The Committee also ensures adequacy of the financial reporting process, reviews draft financial
statements before submission to the external auditors for audit and the audited financial
statements before approval and adoption by the Board. With regards to External Audit, the Audit
Committee is informed by the independent external auditor (National Audit Office of Tanzania)
about the scope, approach and audit deliverables as well as reviews and approves the proposed
audit fee. The Committee’s mandate on Internal Audit covers review of the activities and

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resources of the internal audit function; effectiveness, standing and independence of internal
audit function within the Bank; review of the internal audit plan; and follow up on
implementation of internal audit findings and recommendations. The Audit Committee reports to
the Board of Directors

(c) Banking Supervision Committee The Banking Supervision Committee was also established under the
provision of Section 12(1) of the Bank of Tanzania Act, 2006. Members of the Committee comprise the
Governor who is the Chairman, the Deputy Governors, Representative of the Ministry of Finance and
Planning, Government of the United Republic of Tanzania and Principal Secretary to the Treasury,
Revolutionary Government of Zanzibar and two Non-Executive Directors. The Banking Supervision
Committee is responsible for review of internal control and systems in banks and other financial
institutions; the banking supervision function; adequacy of the prevailing legal and regulatory
framework; operating performance of banks, financial institutions, microfinance service providers and
bureau de change with a view to ensuring safety and soundness in the banking system; financial stability
reports before publication; and on emerging supervisory issues. The Committee advises the Board on
appropriate policy, legislative and regulatory measures that promote a safe banking system and high
supervisory standards and practices

(d) The Finance and Investment Committee The Finance and Investment Committee was established
under the provision of Section 12 (1) of the Bank of Tanzania Act, 2006. Members of the Committee
include the Governor who is the Chairman, the Deputy Governors and four Non-Executive Members of
the Board. The Finance and Investment Committee is responsible for review of the proposed budgets,
reallocation of funds involving capital expenditure and supplementary budget requests; quarterly
budget performance reports; Financial Regulations and Staff By-Laws; requests for disposal of
immovable assets; and Bank’s Annual Corporate Plan. The Committee also reviews the appropriateness
of the Bank’s investment policy and assets allocation strategy, Risk Management Framework for the
Bank’s operations and Project Management framework.

DIRECTOR`S REPORT AS PER TFRS 1

This was revised and issued on 1/1/2010. Considering various changes which have taken place
over the last ten years` period, the board decided to review it for the purpose of accommodating
issues from the current environment. The report by those charged by the Governance will
become effective from 1/1/2021 where by the NBAA believes that changes will help primary
uses and other stakeholders to assess strategies adopted by their respective entities and the
potential for those strategies to succeed toward creating value over the short, medium and long
term periods

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The report is expected to have features in general like; it should refer to comments made in the
previous Directors` report or report by those who charged by the governances where these have
not been overtaken by the events, it should contain narrative discussion rather than merely
numerical analysis, it should follow ‘top-down’ structure discussing individual aspects of the
business in the context of a discussion of the business as a whole, it should make it clear how any
ratio or other numerical information given relate to the financial statement, assist the user to
make informed decisions along with the audited financial statements, The use of simple and non-
technical language for primary users and other stakeholders to understand and also it should
provide highlight of material information on budget issues.

GUIDING PRICIPLES ON PREPARATION AND PRESENTATION OF THE

OPERATING AND FINANCIAL REVIEW
The Operating and Financial review should set out an analysis of the business through the eyes
of those charged by the governance. Also the Operating and Financial Review should focus on
matters that are relevant to the interest of primary users and stakeholders.
The Operating and Financial Review should have a forward-looking orientation, identifying
those trends and factors relevant to the primary users and stakeholders` assessment of the current
and future performance of the entity and the progress towards the achievement of entity’s long-
term objectives

The Operating and Financial Review should complement as well as supplement the audited
financial statements in order to enhance the overall entity disclosure. Also the Operating and
Financial Review should be comprehensive, understandable and consider materiality.
The Operating and Financial Review should be balanced and neutral, dealing with both good and
bad aspects. The Operating and Financial should be comparable over time.

The Operating and Financial Review should provide information to assist primary users and
other stakeholders to assess the strategies adopted by the entity and the potential for those
strategies toward short, medium and long term value creation process.
The key elements of the disclosure requirements recommended to achieve this are; the nature of
the entity’s operation, the development and performance of the entity, The resources, principal
risk and uncertainties and relationships that may affect the entity’s value creation process,
Resources accountability requirements and description of the entity’s capital structure, treasure
policies and objectives and liquidity of the entity

The report by those charged by the Governance must be approved by those charged by the
Governance and signed by the person(s) authorized by the Board of those charged with the
governance, indicating names, designations and date of the approval

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2.2.2 CONTENTS/REQUIREMENTS IN TFRS 1 CURRENTLY
COMPLIED BY SELECTRD ENTIES.

JUBILEE HOLDING LIMITED

i. It follows Top-down structure discussing individual aspects of business in the context

of discussion of the business as whole

ii. It makes clear how any ratio or numerical information given related to the financial
statement

iii. It follows the usage of simple and non-technical language for primary user and other
shareholders to understand.

BANK OF TANZANIA
I. It contains narrative discussion rather than numerical analysis. This will provide
more information that could help primary users, shareholders and others to
understand the information.
II. It assists the users to make informed decision along with the audited financial
statement.
III. It highlights for material information on budgeting issues which also can assist the
financial statement to be presentable and understandable to the primary user and
shareholders.

2.1.3 CONTENTS/REQUIREMENTS IN TFRS 1 CURRENTLY NOT

COMPLIED BY THE SELECTED ENTITIES.

BOT (BANK OF TANZANIA)

Despite the high compliance to the TFRS1 by those charged with governance the company failed
to comply to some requirements as follows;

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1: Disable person and Gender balance.

The Bank of Tanzania doesn’t show it policies and steps to ensure gender balance in it’s
operation and policies used to considering disable person ,which makes the report not complying
to TFRS1 by those charged with governance .As at 30 June 2019 and 2018 the Bank had the
following distribution statistics according to Gender;

Gender 2019 % 2018 %

Male 756 61.8 771 61.1
Female 467 38.2 490 38.9
Total 1223 100 1261 100

2: Prejudicial issues.

TFRS1 required all the entities to report all issues which were outside the control of the
respective entity in archiving their objectives but for Tanzania Bank , During the year ended 30
June 2019 there was no serious prejudicial matter to report as required by TFRS1 directors
report.

3: political and Charitable donations.

This entity doesn’t provide clear information by those charged with the governance.

. Separate total of all political and charitable donations.

. Names of the individual political recipents of the donation.

JUBILEE INSURANCE

1: Director s biography

The “JHL” entity has the director s biographies which express and shows the profile of directors
and their short background which is not covered in TFRS1 by those charged by governance.

2: Stock of exchange information

Directors report of “JHL” and “BOT” entities shows information of the entities in Dar es salaam
Stock of exchange about the share traded at the time the entity has been listed there which is not
covered in TFRS1.

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 2.1.4 CONCLUSION

The directors report as per TFRS1 is required to display and include set of things including,
details of particular matters, key performance indicators, nature of operation, objectives and
strategies, current and future development and performance, resources, approval, effective date,
political and charitable donations, appointment of auditors, employee welfare and pre-judicial
issues.

Also the entities should provide information’s that assist primary users and other stakeholders
about the strategies and objectives. The resources, principal risks and uncertainties and
relationships that may affect entity’s capital structure, treasury policies and objectives, liquidity
of the entity both in financial year under review and resources accountability requirements

CHAPTER THREE: RECOMMENDATIONS

1.1 RECOMMENDATIONS TO THE NBAA

The National Board of Accountants and Auditors should consider the following to the high
compliance of the entities to the standards it set;

 Provision of education to the entities on how to prepare the Report by those charged with
governance in form of practical illustration since the literally regulations are not enough.
 The board also should consider all the suggestions made by the entities so as to make
standards which cover the needs of all entities.
 The fines should be imposed to those who fail to comply with the standards set by the
board.
1.2 RECOMMENDATIONS TO THE SELECTED
ENTITIES

For the entities to meet with the standards set by the board should consider the following;

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  The entities should be open about some of the details needed, for example Jubilee
Holdings Limited has not give out information about their mission, vision and core
values.
 The entities should maintain gender balance, this is real because the board of directors of
both entities shows the number of men is greater than women
 The entities also should submit all challenges that they are facing in the course of their
activities.
1.3 RECOMMENDATIONS TO THE COURSE
INSTRUCTORS

The course instructors have responsibility to ensure that the activities assigned to the students are
well understood to them and have ability to apply in practical way the consumed ideas.

1.4 RECOMMENDATIONS TO THE INSTITUTE OF

FINANCE MANAGEMENT
 The Institute has a duty to ensure that students are informed with all information from the
National Board of Accountants and Auditors relating to presentation of the financial
reports by the entities.
 Also the institute can provide means that will ensure that the students conduct field
studies in the various entities so as to see how they are preparing their reports.

ATTACHMENTS
FINANCIAL STATEMENT OF BANK OF TANZANIA

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24
25
 STATEMENT OF CASH FLOW

FINANCIAL STATEMENTS OF JUBILEE HOLDING LIMITED

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27
28
29
30
31
32
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 REFERENCES
1. The National Board of Accountants and Auditors (NBAA) (The TFRS 1 By those
charged with Governance)
2. www.jhl.go.tz
3. www.Bot.go.tz
4. www.dse.go.tz/contents/useful links

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