BANK OF TANZANIA

1999/2000

1998/99

INCOME

SCHEDULE

TZS.

TZS.

Income on Foreign Operations

(2)

29,391,126,571

20,802,192,917

Income on Domestic Operations

(3)

36,848,868,691

11,581,497,168

66,239,995,262

32,383,690,085

EXPENSES

Expenditure on Foreign Operations

(4)

2,525,692,784

2,100,324,132

Expenditure on Domestic Operations

(5)

5,844,475,704

4,395,706,756

Currency Issue Expenses

(6)

3,823,085,928

2,818,471,558

Administrative Expenses

(7)

23,596,750,323

18,856,012,446

Depreciation

(8)

2,916,601,130

2,544,027,256

Provision for Bad and Doubtful Debts

334,562,675

13,023,480

39,041,168,544

30,727,565,628

OPERATING PROFIT

27,198,826,717

1,656,124,457

EXCEPTIONAL ITEM

Net Write off

3,315,840,138

35,075,737

3,315,840,138

35,075,737

NET PROFIT FOR THE YEAR

23,882,986,579

1,621,048,720

DISTRIBUTION OF PROFIT

GENERAL RESERVE

5,970,746,645

405,262,180

STAFF HOUSING FUND

1,194,149,329

81,052,436

RESERVE FOR PROJECTS

10,000,000,000

PAYABLE TO THE GOVERNMENT

6,718,090,606

1,134,734,104

TOTAL

23,882,986,579

1,621,048,720

NOTES ON THE ACCOUNTS

SCHEDULES 1 TO 20 FORM PART OF THE ACCOUNTS

MR. D. T. S. Ballali

GOVERNOR

NOTES ON THE ACCOUNTS

SCHEDULE I

1.

ACCOUNTING POLICIES

(a)With the exeption of fixed assets, foreign assets and liabilities, these accounts have been prepared on the basis of the historical cost convention.

(b) Depreciation

Depreciation is provided for on a straight line basis to write off the cost of the fixed assets over their expected useful lives. Motor Vehicles and Computer depreciation rates changed from 33 1/3% and 12 1/2%

to 25% and 20% respectively in 1998/99. The review was necessary in order to arrive at more realisic economic life of the above assets.Other annual rates were used consistently with those of the previous years.

The rates used are as indicated below:

- Office Premises

5%

- Residential Premises

6 2/3%

- Machinery and Equipment

12 1/2%

- Office Furniture

15%

- Motor Vehicles

25%

- Staff Club Premises

10%

- Staff Club Furniture

25%

- Computers

20%

- Mission Critical Software

20%

- Lease Hold Office Premises

5%

Pursuant to the Bank's policy, fixed assets acquired during the year are depreciated in full irrespective of the date of acquisition and those disposed off are not depreciated in the year of disposal.

(c) Provisioning and Write off Policy

In accordance with the Bank's Provisioning and Write Off Policy, a provision of 50% and 100% of outstanding non-government debts for debts which have been outstanding for up to one year and beyond one year

respectively has been provided. A total of TZS 334,562,675 has been provided as provision for bad debtes while a net of TZS 3,315,840,138 was written off during this accounting period.

(d) Foreign Currency Translation

(i) Foreign Currency transactions are translated into TZS at rates of exchange ruling on the respective dates of the transactions. Exchange gains or losses arising there on are taken into account in

determining net operating results for the year.

(ii) Foreign assets and liabilities outstanding as at the end of every day during the year are translated at mean rates of exchange ruling as at the end of the respective day. Deferences in exchange arising as a

result thereof are transferred to the Revaluation Account pursuant to section 15(3) of the Bank of Tanzania Act, 1995.

(e) Government Securities

Government Securities are stated at cost.

2.

GOLD AND FOREIGN EXCHANGE

Gold and Foreign Exchange are stated in the Balance Sheet at TZS.589,018,812,817. A total of 79,678.8 ounces worth TZS. 25,235,164,569.80 have been placed with J.P. Morgan Bank - London.

3.

INVESTMENT IN AFREXIMBANK

Investment in Afreximbank is stated in the Balance Sheet at TZS 959,448,000 which is equivalent to USD 1,200,000 being called up share out of total alloted shares worth USD 3,000,000.

Share certificate will be issued when the remaining USD 1,800,000 shares have been called up and paid for.