Ghana Cocoa Board Board Annual Report 2012 final 4... · Ghana Cocoa Board 43nd Annual Report & Financial Statements for the Year Ended September 2012 3 Chief Executive’s Report

Ghana Cocoa Board 43nd Annual Report & Financial Statements

for the Year Ended September 2012

Ghana Cocoa Board 43nd Annual Report & Financial Statements for the Year Ended September 2012

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Table of Contents

i

Auditors iii

Registered Office iii

Highlights iv

Board of Directors 2011/12 v

Heads of Subsidiaries and Divisions 2011/12 v

Chairman’s Statement 1

REVIEW OF BUSINESS 3

1. Producer Price 3

2. Cocoa Purchases Performance and Licensed Buying Companies 3

3. Coffee and Sheanut Purchases/Exports 4

4. Performance of Divisions and Subsidiaries 5

A Q.C.C.

a. Selective Grading of cocoa 5

b. Grading and Sealing 5

i. Cocoa 5

ii. Other Produce 5

c. Check Sampling 5

d. Disinfestation Activities 6

i. Insect Control Operations 6

ii. Shipment Inspection and Treatment 6

B. C.M.C. (Gh.) Ltd. 6

a. Shipments and Deliveries 6

i. Cocoa Beans 6

ii. Cocoa Products 8

C S.P.U. 8

a. Hybrid Seed Pods 8

b. Cocoa Seedlings 9

D. CSSVD Control Unit 9

a. Field Operations 9

E. CRIG 9

a. Cocoa Agronomy, Development/ Improvement, Capsid, Black Pod and CSSVD Control

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Table of Contents

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b. Coffee Agronomy, Development/ Improvement Coffee Pests and Disease Control 10

c. Kola Agronomy, Development / Improvement, Kola Pests and Disease Control 11

d. Sheanut Agronomy Development / Improvement, Sheanut Pests & Disease Control 11

e. New Products Development 11

5. Financial Results 11

i. Profit 11

ii. Export Duty 12

6. Community Improvement Projects 12

7. Major Visitors to COCOBOD 13

8. Financial Statements for the Year Ended 30th September, 2012 14


AUDITORS

(1) Pannel Kerr Foster, Chartered Accountants Farrar Avenue Post Office Box GP 1219 Accra.

(2) James Quagraine & Co., Chartered Accountants Post Office Box GP 3947 Accra.

REGISTERED OFFICE Cocoa House 41 Kwame Nkrumah Avenue Post Office Box GP 933 Accra

Tel. 233 -302 – 661752/678972/661782/683300 Fax: 233 -302- 667104/665076 E-mail: [email protected] Website: www.cocobod.gh

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Highlights

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2010/11 2011/12 % CHANGE

1. Turnover (Gross) (GH¢) 4,754,198,210 4,619,210,810 (2.84)

2. Total Assets (GH¢) 203,118,905 176,086,024 (13.31)

3. Equity Capital (GH¢) 393,290 393,290 -

4. Current Assets (GH¢) 1,745,071,448 2,559,820,351 46.69

5. Current Liabilities (GH¢) 1,892,428,013 2,453,497,867 29.65

6. Producer Prices:

- Main Crop (Cocoa) (GH¢) - (per tonne) 3,200 3,280 2.50

- Mid Crop (Cocoa) (GH¢) - (per tonne) 3,200 3,280 2.50

- Coffee (Hulled) (GH¢) - (per tonne 1,000-1,020 1,000-1,020 -

7. Number of Subsidiaries and Divisions 5 5 -

8. Total Employees 7,060 7,368 4.36

9. Quantity Purchased/Exported (Tonnes):

Cocoa 1,024,553 879,348 (14.17)

Coffee (purchases) 1,419 3,254 129.32

Sheanut (exports) 389,403 111,194 (71.45)

10. Achieved F.O.B. (US$) - per tonne of Cocoa

3,294.00 2,918.00 (11.41)

* Adverse changes in brackets.


Board of Directors and COCOBOD Management

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BOARD OF DIRECTORS

2011/12Dr Percival Yaw Kuranchie - ChairmanMr. Anthony Fofie - Chief ExecutiveProfessor Kofi Nketsia Afful - MemberDr. Agyemang-Atuahene Kontor - MemberDr (Mrs.) Bernice Adiku-Heloo - MemberMr. Paul Asimenu - MemberMr. K. B. Amissah-Arthur - Member Mrs. Afriyie Haffar - MemberNana Adjei Damoah - MemberMr. Charles Tetteh Kwao Dodoo - Member

COCOBOD MANAGEMENT

2011/12Mr. Anthony Fofie - Chief ExecutiveMr. William Mensah - Deputy Chief Executive (F&A) Dr. Yaw Adu-Ampomah - Deputy Chief Executive (A&QC) Mr. Kwabena Asante-Poku - Deputy Chief Executive (OPS) Dr. Victor K. Osei - Director, HealthMrs Miriam Okwabi - Director, FinanceMr. Alexander M. Asiedu - Director, General ServicesMr. Kosi Gone Traugott - Director, AuditMr. A.A Appleton - Director, Human ResourceMr. Ebenezer Tei Quartey - Director (RM&E)Mr. G. Anto-Boateng - Director, Scholarship UnitMr. Kwame O. Adjinah - Dep. Director, CODAPECMr. John Clottey-Sefa - Director, Legal ServicesMr. Thomas E.K. Dandzo - Dep, Director, Special ServicesDr. Godwin A. Lartey - Dep. Director- HealthMr. Charles K. Kukah - Dep. Director, (M&E)Mr. Emmanuel E. Opoku Dep. Director, (R&D)Mrs. Elizabeth M.A Abodurin - Dep. Director, AuditMr. F.A Temeng - Dep. Director, Human ResourceMr. LCT Zaukuu - Dep. Director, Finance

HEADS OF DIVISIONS/SUBSIDIARIES

2011/12Nana-Oduro Owusu - Managing Director, CMC (Gh). Ltd Rev. K. Abaka-Ewusi - Executive Director, CSSVDCUMr. K Gorkeh-Sekyim - Managing Director, QCCMr. K.B Prempeh - Executive Director, SPU Dr. F.M Amoah - Executive Director, CRIG


Board of Directors

Dr. Percival Yaw KuranchieChairman

Dr. (Mrs.) Bernice Adiku-HelooMember

Mr. Charles Tetteh Kwao Dodoo

Member

Mr. Paul AsimenuMember

Prof. Kofi Nketsia AffulMember

Mrs. Afriyie HaffarMember

Dr. Agyemang-Atuahene Kontor

Member

Mr. Kwesi Bekoe Amissah - Arthur

Member

Nana Adjei DamoahMember

Mr. Anthony FofieChief Executive

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Chairman’s Statement

ECONOMIC BACKGROUND

World Cocoa Environment 2011/12 Season

World cocoa production as reported by the International Cocoa Organisation (ICCO) was estimated to have decreased by 7.91% from the 4.30 million tonnes in 2010/11 to 3.96 million tonnes in 2011/12. The decline in global production could be attributed to the erratic rainfall and severe harmarttan related weather conditions which prevailed mostly during the period. Similar weather conditions prevailed across the West Africa sub-region which affected output expectations from the sub-region. Cote d’Ivoire and Ghana, however, maintained their traditional positions as the two leading producers in the world by contributing about 60% of the global production.

Global consumption of cocoa beans, as measured by grindings, increased by 2.05% from 3.91 million tonnes in 2010/11 to 3.99 million tonnes in 2011/12. This was as a result of a shift in global consumption pattern in emerging countries particularly Asia. Prices of cocoa on the world market experienced a downward trend during the 2011/12 cocoa season. The average international cocoa prices as measured by the ICCO daily price for the 2011/12 season settled at US$2,396, a decrease of 22.81% over the 2010/11 price of US$3,104. Price movements were asymmetrical during the 2011/12 season as a result of the unresolved European debt crisis and its rippling effect on cocoa consumption as well as the bearish news of falling demand in European markets. Concerns over dry weather conditions in West Africa were also fundamental in price volatility.

The Local Scene

Sourcing of off-shore receivables-backed trade finance facility to support cocoa purchases continued during the year under review. Under this arrangement, COCOBOD secured a syndicated loan of US$2 billion from a consortium of banks, including Standard Chartered Bank - London, Societe Generale, Bank of Tokyo-Mitsubishi UFJ Limited, Sumitomo Mitsui Banking Corporation and Ghana International Bank plc during the year. COCOBOD successfully repaid the loan with interest within the agreed period.

Operating Results

COCOBOD pursued strategies to surmount challenges associated with the production and marketing of cocoa. The Board, however, made a loss of GH¢14,935,967 in 2011/12 compared to GH¢9,826,237 profit recorded in 2010/11.

COCOBOD paid GH¢76,000,000 as export duty during 2011/12 season as against GH¢148,679,011 paid in the 2010/11 financial year.

Future Outlook

In spite of a decline in production in the 2011/12 season, compared to the unprecedented production of 1.02 million tonnes during the previous year, the future of the cocoa industry in Ghana continues to be positive. The collective efforts by government, farmers, COCOBOD, Licensed Buying Companies (LBC’s) and other stakeholders in the industry through adherence to good agronomic practices, payment of remunerative producer price, application of fertilizers, disease and pest control, use of hybrid cocoa


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Chairman’s Statement, continued

seedlings and scientific research will ensure the cocoa industry sustains the production levels. COCOBOD will continue to focus on deriving the maximum benefits from the positive growth of the global cocoa economy and pursue appropriate strategies to overcome emerging challenges. It is our desire to continue with the public-private partnership extension module introduced two years ago. This extension model, which was designed to build capacity of farmers to take cocoa farming as a business enterprise, involves the formation of Farmer Based Organizations (FBO) and the training of Local Community Facilitators (LCF) to facilitate extension service delivery. The Government through COCOBOD made available twenty (20) million hybrid cocoa seedlings to be distributed to farmers free of charge. This was to augment farmers’ role in the implementation of the National Cocoa Rehabilitation Programme. As part of its effort to revamp the sheanut industry, the Government of Ghana commissioned a sheanut processing factory at Buipe in the Northern Region. COCOBOD has developed rules and regulations as well as sanctions to guide the operations of processing companies in Ghana. The document is to ensure that, local processors and their collaborators who indulge in malpractices detrimental to the industry are sanctioned. We will also ensure that appropriate sanctions are imposed on LBCs that contravene the rules and regulations guiding the internal marketing of cocoa in order to maintain discipline in the cocoa industry. Government, through COCOBOD Management, will create a favourable working environment to promote industrial harmony, including holding regular platform meetings with stakeholders in the cocoa industry in order to maintain good working relationship. To conclude, I wish to indicate that the Board of Directors will continue to maintain good relations with COCOBOD Management, support the implementation of sound operational policies to maintain Ghana’s commitment to the International Cocoa Agreement to achieve sustainable cocoa production.

DR. PERCIVAL YAW KURANCHIECHAIRMAN


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Chief Executive’s Report for the Year Ended 30th September, 2012

REVIEW OF BUSINESS OPERATIONS

1. PRODUCER PRICE

The 2011/12 crop year opened on 14th October 2011 with an upward revision of the producer price of cocoa from GH¢3,200 per tonne to GH¢3,280 per tonne representing a 2.5% increase from the previous year’s price.

Privatization of the Coffee and Sheanut sectors resulted in the producer prices of these produce being determined through negotiations between farmers and Licensed Buying Companies (LBCs). During the period under review, the average farm gate price paid per tonne of coffee ranged between GH¢1,000.00 - GH¢1,020.00 while sheanut farmers received GH¢400.00 per tonne for their produce.

2. COCOA PURCHASES PERFORMANCE AND LICENSED BUYING COMPANIES (LBCs)

The 2011/12 cocoa season marked nineteen (19) years of participation by private companies (LBCs) in the internal marketing of cocoa. Thirty-two (32) out of thirty-five (35) registered LBCs purchased cocoa during the year under review.

Declared cumulative cocoa purchases for the 2011/12 crop year was 879,348 tonnes, as compared to 1,024,553 tonnes recorded in 2010/11. This tonnage represented 14.17% decrease in production over the 2010/11 crop year purchases.

The list of LBCs in good standing during the 2011/12 crop year were as follows:

1. Produce Buying Company (PBC) 19. Farmers Star Limited (FSL)

2. Federated Commodities Limited (FCL) 20. Fredako Cocoa Co. Ltd. (FCCL)

3. Kuapa Kokoo Limited (KKL) 21. Splendid Business Services (SBS)

4. Adwumapa Buyers Limited (ABL) 22. Abafuaba Limited (ABFL)

5. Transroyal (Gh) Limited (TGL) 23. Ghana Co-op Mktg. Assoc. (GCMA)

6. Cocoa Merchants (Gh) Ltd. (CMGL) 24. Chartwell Ventures Ltd. (CVL)

7. Olam (Gh) Limited (OLAM) 25. Royal Commodities Limited (RCL)

8. Diaby Company Ltd. (DCL) 26. Allied Commodities Ltd. (ACL)

9. Akuafo Adamfo Mkting Ltd.(AAMC) 27. Farmers Alliance Limited (FAL)

10. Armajaro (Gh) Limited (AGL) 28. Evadox Company Ltd. (EVL)

11. Alhaji Sulemana Ind. Ltd.(ASIL) 29. Aboafo Buyers Limited (ABCL)

12. Duapa Buyers Company Limited (DBCL) 30. CDH Commodities Ltd. (CDH)

13. Yayra Glover Limited (YGL) 31. Marpie Enterprise Limited (MEL)

14. Abapa Golden Limited (ABGL) 32. Universal Co-operative Limited (UCCL)

15. Blossom Exports Limited (BEL) 33. Akuotec Company Limited (AKL)

16. Sika Aba Buyers (SABL) 34. Fortune Tree Company Ltd. (FTCL)

17. Dio Jean Company (DJC) 35. Kumankoma Company Ltd (KCL)

18. Sompa Kokoo Ltd. (SKL)


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Chief Executive’s Report for the Year Ended 30th September, 2012, Continued

The Produce Buying Company Limited (PBC) continued to be the leading buyer of cocoa with 35.27% share of the market. Akuafo Adamfo and Armajaro Ghana Limited followed in second and third places with market shares of 12.82% and 8.45% respectively. The other 29 companies together accounted for 43.46% of the market. 3. COFFEE AND SHEANUT PURCHASES/EXPORTS

The private sector continued to lead the internal and external marketing of coffee and sheanuts during the 2011/12 crop year. The number of coffee and sheanut LBCs was fifty (50) and twenty (20) respectively during 2011/12. Ten (10) coffee LBCs namely, Time Marketing Company Ltd, Ghalia Ghana Ltd, Melgrove Company Limited, De Jong, Al Noad, Emof Ventures, Cocoa Research Institute of Ghana/Cocoa Marketing Company (CRIG/CMC), Yoal Limited, Plantations Resources and Bet Exports Limited were the only companies that reported coffee purchases totalling 3,254 tonnes during the period. COCOBOD with the support of Government continued with the coffee rehabilitation project which focused on boosting production. The overall aim of the project was to transform the coffee sub-sector as part of the modernization of the Agricultural sector in Ghana.

Sheanuts exported during the year 2011/12 was 111,194 tonnes valued at US$25,086,810. Produce Buying Company Limited, Kassardjan Industries Limited, Shebu Company Limited, 3F Ghana Limited and Wilmardel Limited were the major operators in the industry.

SOURCE: RM&E DEPT., COCOBOD

The performance of the respective LBCs during the season under review is shown in Figure 1.


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A. QUALITY CONTROL COMPANY (QCC)

QCC’s core functions of grading/sealing and disinfestation of schedule crops of COCOBOD (i.e. cocoa, coffee and sheanuts) continued during the period under review. The Company also inspected and certified the storage facilities of Cocoa Marketing Company (Gh) Ltd., Unicontrol (Gh) Ltd. and Licensed Buying Companies at both up-country and take-over centres, in accordance with Cocoa Industry Regulations 1968/LI598. The company, as part of its responsibilities, intensified education of farmers on the best known agronomic practices in order to maintain the premium quality of Ghana’s cocoa.

a. Selective Grading of Cocoa

Prescribed codes for the various cocoa bean-size categories which differentiate the 2011/12 crop from the previous years’ are indicated below:

BEAN SIZE BEAN COUNT PRESCRIBED CODES

CATEGORY PER 100 GRAMS 2011/12 SEASON Super Main Crop Up to 90 Q Main Crop 91 to 100 C Super Light Crop 101 to 110 D Light Crop 111 to 120 M Small Beans 121 to 130 E Type “4” 131 to 150 G Remnant 151 to 180 R b. Grading and Sealing

(i) Cocoa

QCC graded and sealed 877,326 tonnes of cocoa by the end of 2011/12 as against 1,023,038 tonnes in 2010/11. The graded and sealed figure represented 99.77% of the total declared purchases of 879,348 tonnes.

(ii) Other Produce Inspected

QCC also inspected and certified the following produce during the 2011/12 crop season.

Produce 2010/11 2011/12

Cocoa Waste (tonnes) 6,038 2,821Coffee (tonnes) 93 52 Sheanut (tonnes) - -

c. Check Sampling

QCC carried out check sampling activities to certify the purity of every consignment of sealed cocoa delivered by the LBCs to CMC at the Take-Over Centres. Additionally, parcels of cocoa for export or delivery to local processing factories were check-sampled prior to shipment or delivery to the local processing factories.


4. PERFORMANCES OF DIVISIONS AND SUBSIDIARIES


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d. Disinfestation Activities

The company also undertook the following disinfestation activities during the period. (i) Insect Control Operations: 2011/12 2010/11

1. Number of sheds sprayed 50,453 17,734 2. Number of sheds fogged 62,058 50,3043. Average number of times sheds were fogged 3 34. Tonnage of cocoa fumigated for export (including re-fumigated stock) 1,311,734 1,034,170 (ii) Shipment Inspection and Treatment:

Number of vessels inspected and treated at the twoports before loading of produce for export 458 393

B. COCOA MARKETING COMPANY (GH) LIMITED (CMC)

CMC continued to market and ship cocoa on sales contract to local and overseas buyers from Takoradi and Tema ports. (a) Shipments and Local Deliveries

(i) Cocoa Beans

Cocoa beans shipped to overseas destinations during 2010/11 crop year totalled 813,835 tonnes. The FOB value of the beans shipped amounted to GH¢2,714,563,447.82. Deliveries to local cocoa processing companies totalled 227,412 tonnes. The local sales were delivered to WAMCO, Barry Callebaut, Cocoa Processing Company Limited, Afrotropic Cocoa Processing Limited, Commodities Processing Industries Limited, Plot Enterprise, Cargill (Ghana) Limited and Archer Daniels Midland Cocoa (Ghana) Limited. The direction of trade for beans shipments as well as cocoa deliveries to local processing factories are shown in Figures 2 and 3 respectively.



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The European Union continued to be the major export destination for Ghana’s cocoa beans. Shipment of cocoa to the EU accounted for about 55.70% of total cocoa beans exported in 2011/12 as depicted in Figure 2. Figure 3 depicts the shares of cocoa beans processed by respective local processing factories during the period under review. Barry Callebaut Limited processed the largest share of 31.79%.


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(ii) Cocoa Products

Exports of cocoa products by six (6) cocoa processing factories during the 2011/12 year comprised 103,767 tonnes of cocoa liquor, 21,380 tonnes of cocoa butter, 9,587 tonnes of cocoa cake and 9,849 tonnes of cocoa powder. These exports were valued at GH¢588,768,106, GH¢119,719,117, GH¢60,147,710 and GH¢74,299,625 respectively. Details of cocoa products shipments by destination during the 2011/12 season are as shown in Figure 4 below.

Trend analysis of cocoa products shipments confirmed the EU market as Ghana’s most important destination for the cocoa trade. The bulk of cocoa products produced by local cocoa processing factories were delivered to European buyers.

C. SEED PRODUCTION UNIT – (SPU)The Seed Production Unit (SPU) produced and distributed hybrid cocoa seed pods and seedlings to farmers during the 2011/12 season.

(a) Hybrid Seed PodsA total of 5,521,703 hybrid cocoa pods representing 66.38% of the set target of 8,319,864 were produced. Out of the total hybrid pods harvested, 5,279,967 representing 95.62% was distributed as field usable totals. A total of 4,354,588 pods were sold to farmers while the remaining 925,379 were used by SPU and CSSVDCU to raise seedlings for distribution to farmers.




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(b) Cocoa SeedlingsA total of 18,779,925 cocoa seedlings, representing 104.33% of the set target of 18,000,000, were raised during 2011/12. These seedlings were distributed to the CSSVD Control Unit to support replanting programs on CSSVD treated farms and some of the seedlings sold to farmers for the rehabilitation of over-aged and died-out cocoa farms through the International Institute of Tropical Agriculture (IITA) and Sustainable Tree Crops Program (STCP). D. COCOA SWOLLEN SHOOT VIRUS DISEASE CONTROL UNIT (CSSVDCU)

(a) Field OperationsThe CSSVD Control Unit continued with cocoa swollen shoot virus disease control activities during the 2011/12 crop year. The Unit was also mandated to carry out the Cocoa Extension and Cocoa Rehabilitation Scheme. Training of Farmer Based Organizations (FBOs) and Local Community Facilitators (LCF) in cocoa extension service delivery as well as the removal and replanting of old cocoa trees continued during the year under review.

A total of 590 sectors, involving 2,728 blocks and covering an area of 934,206.25 hectares, was surveyed during the year under review. In addition, the Unit discovered 8,427 swollen shoot outbreaks, covering a land area of 74,642.73 hectares with 68,707,971 estimated diseased trees. The Unit also completely treated 1,815 outbreaks with the removal of 21,467,618 contact trees as against 17,823,293 removed in 2010/11. Outstanding CSSVD outbreaks stood at 35,284 with 190,382,920 estimated diseased trees.

The CSSVD Control Unit disbursed GH¢4,845,936.26 as initial treatment grant to owners of 8,173.25 hectares of cocoa farms treated against CSSVD during its 2011/12 operations. A total of GH¢4,481,804.69 was paid as wages for the removal of 9,017,576 infected trees while GH¢8,541,594.98 was paid as replanting grant for 5,722.50 hectares.

E. COCOA RESEARCH INSTITUTE OF GHANA (CRIG)

Scientific research activities carried out by CRIG during the 2011/12 crop year included the following.

a. Cocoa Agronomy, Cocoa Development/Improvement, Capsid, Black Pod and CSSVD

Controli. Cocoa establishment confirmed the effects of slash-burn and slash-no burn as land clearing

methods and intercrops on soil fertility, growth and yield of cocoa. An evaluation of Cedrela odorata, a commercial timber species, as permanent shade in cocoa cultivation was also carried out. An evaluation of a diversified cocoa/fruit tree system showed that treatments had significantly different effect on the growth of cocoa at 20 months after transplanting.

ii. Intercropping cocoa with food crops is beneficial even in the absence of fertilizer application.

Establishing cocoa by close planting and thinning slightly increases labour cost which has no effect on yield and does not vindicate peasant farmers practice. Responses of cocoa to fertilizers vary with locations. Production of healthy and diseased pods did not differ significantly with the month of application of the fertilizers at the locations.

iii. During progeny trials, families with the best establishment success, acceptable vigour and precocity were obtained from T63/971 x SCA 9, and crosses between PA 7, PA 150 and T60/887 with CRG 6035 and MAN 15-2. Analysis of three newly established trials that aim to assess the potential



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of previously under-utilized clones have provided evidence of existence of clones of high potential among these groups.

iv. Under the cocoa fungal diseases management studies, a black pod survey showed that Phytophthora palmivora was commonly encountered in farms. Mistletoe infestation, white thread blight root rots and stem canker diseases were common on most farms in Ghana. In addition, a severe outbreak of pink disease was observed in some parts of Eastern Region. Also, decoctions of Momordica charantia, Cryptolephis sanguinolenta and Tridax procumbens were tested against the black pod disease on the field and Momordica charantia and Cryptolephis sanguinolenta were found to be more effective than Tridax procumbens. Again, oil from Xylopia aethiopica, and cashew nut shell liquid were tested and also found to be effective for the control of the disease.

v. The search for safer alternatives to currently used insecticides led to the recommendation of tested products to be used on cocoa. For the control of mirids and other insects, Miricon EC, Rimonstar and Acetaster were approved. For the control of termites, Hercules 50SC was to replace Dursban which has been banned on cocoa. Pyrethrum 5EW was recommended to be used on organic cocoa. The search for natural enemies such as entomopathogens continued with isolation of Baeuvaria bassiana for mired control. Studies on biology of the cocoa stem borer provided relevant information to develop integrated pest management

vi. Cocoa swollen shoot virus (CSSV) thrust, trials indicated that the mild strains cross-protection was effective in controlling CSSV while having very little or no effect on yield and growth of the trees. However, it is still important to continue with the data collection to determine how long the protection can last. For the alternative host trial, Artcocarpus communis seem to be harboring a virus which is yet to be clearly identified.

b. Coffee Agronomy, Coffee Development/Improvement, Coffee Pests and Disease Control

i. Application of coffee husk alone enhanced coffee yield at both Tafo and Afosu in a trial that investigates the productivity of coffee tree through the combined application of fertilizers, mulch and weed control. However, weed control methods did not affect coffee yield at both locations. Results from the evaluation of foliar fertilizer formulations on growth and yield of coffee showed that, after 36 months of planting, the fertilizers applied did not significantly influence the growth of young plants.

ii. Hybrid seed planting materials with bean yield of 2.0 to 2.2 tons/ha, bean weight of 14.5 to 15.1g/100 beans, tolerance to drought and good architectural traits are currently being supplied to farmers alongside clone planting material. An improved population of expected bean yields of 1.8 tons/ha and bean weight of 14.0g/100 beans, among other agronomic traits of interest, has also been released to farmers as tentative seed planting material.

iii. A programme has been initiated to determine factors that affect post-harvest quality of coffee, and establish how green bean quality could be improved during processing.



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c. Kola Agronomy, Development/Improvement, Kola Pests and Disease Control

i. Twelve (13) Kola genotypes were introduced into the Kola genebank at CRIG to widen the genetic base of materials needed for successful improvement of the crop. The materials are currently being evaluated for ease of establishment and growth habit.

ii. Kola progeny and clonal trials included thirteen new kola accessions which were introduced into the kola germplasm collection to widen the genetic base. Evaluation made on the yield of some crosses in the progeny trial showed a significant difference among the genotypes used. In the clonal trials, results indicate a significant difference among clones used.

d. Sheanuts Agronomy/Cashew Development, Sheanuts Pests and Disease Control i. Investigations into pest control potentials of entomopathogens associated with the major insect

pests of cashew, B bassiana has the potential for use in the management of the girdler. Chemical insecticides continued to provide good protection to cashew trees with Imidacloprid performing better than Bifenthrin and Thiamethoxam

ii. The study of the use of fertilizers on cashew, showed that application of poultry manure and cow dung significantly influenced the growth of young cashew as well as soil chemical properties. The lack of effect of intercropping on early yield of cashew indicates that cashew farms can be intercropped with yam and maize to enhance establishment and generate income to partially offset the cost of establishment.

e. New Products Development Production of cocoa based by-products continued during the period. Development of cosmetics

and edible products from shea butter and shea pulp continued. Studies on the shelf-life of Jam developed from shea fruit pulp have shown that the product can be stored for more than a year. Studies on the use of reject cashew kernels in broiler feeding revealed that reject cashew kernels could form up to 150g of broiler finisher diets without any deleterious effects and reduces the use of maize, fishmeal and soybean meal. Shea kernel cake treated with 0.01M NaOH is found to be the most practical way of removing tannins in an on-going study aimed at using the cake in animal feeding.

5. FINANCIAL RESULTS

Highlights of the audited accounts for the 2011/12 season included the following:-

(i) Profit/Loss

During the 2011/12 financial year, COCOBOD made a loss of GH¢14,935,967 compared to GH¢9,826,237 profit recorded in 2010/11. The 2011/12 financial year recorded an achievable FOB price of US$2,918.00 per tonne as against US$3,294.00 per tonne in the 2010/11 financial year.



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(ii) Export Duty

COCOBOD paid a total of GH¢76,000,000.00 as export and local duty into Government Treasury in 2011/12 crop year as against GH¢148,679,010.89 paid during the 2010/11 crop year.

6. COMMUNITY IMPROVEMENT PROJECTS As part of our corporate social responsibility, COCOBOD made cash donations to various institutions

during the 2011/12 season. The institutions that received sponsorship during the period were:-

1. Aburiman Council2. Ghana Chemical Society3. Akuapem-Mampong Traditional Council4. Manso-Abore Traditional Area5. University of Ghana Medical Students’ Association (UGMSA)6. Adansi South District Assembly7. The Security Services Sports Council8. Ministry of Food and Agriculture9. Prison Ladies Association (PRILAS)10. Akyem Abuakwa Traditional Council11. New Juaben Traditional Council12. Sewass Old Students’ Association13. Gbi (Hohoe) Traditional Area14. National Commission for Civic Education15. Saltpond- Bakado Development Committee16. Hohoe E.P Secondary School Old Students Association17. Musicians Union Of Ghana18. Gbidukor Festival19. Ghana Business Coalition Against HIV and Aids20. Adukrom Traditonal Area21. General Agricultural Workers’ Union of G.T.U.C22. E-On 3 Company Limited23. Seday Car Accessories Ltd24. Daasebre Awuah Kotoko II25. Ghana Military Police , Medo Line,Burma Camp26. Pure Creations Limited27. University for Development Studies28. National Kidney Foundation29. Editors Forum Ghana30. Evelyn Bekoe (Launching of Book) 31. Guan Congress32. Ghana Education Service33. Godwin Yirenkyi (publication on cocoa)34. Ghana Aids Commission35. FGMSA- March Meeting 2012 Ghana



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36. Chief of Staff37. College of Health Sciences (University Of Ghana)38. University of Ghana Faculty of Science39. Institute of Human Resource Mg’t Practitioners, Ghana40. National Road Safety Commission41. Ghana Cocoa Coffee Sheanut Farmers Association42. Ghana Trades Union Congress43. Candela Medicals Ltd44. Asogli Yam Festival Committee45. Muslim Youth Support Initiative46. Ghana Science Association47. Awansah Ahenfie ( Osabarima Adusei Peasah IV)48. Volta Trade, Investment and Cultural Fair49. Nana Ama Serwah Nyarko Silver Jubilee Anniversary50. Adabraka Stool Authority51. National Best Teacher Award52. National Communications Authority53. Bunso Liverpool Football Club54. National Youth for Peace55. Institute of Chartered Accountants (Ghana)56. University of Ghana Business School57. E- Crime Project58. Akatsi District Assembly59. Cocoa Advocates Movement60. Demonstration School for the Deaf

7. MAJOR VISITORS TO COCOBOD

COCOBOD received a number of delegations with varying missions during the 2011/12 crop year. This includes a delegation from the Swedish National Board of Trade and a delegation from Nigeria’s Ministry of Agriculture and Rural Development to share experiences on current practices in the cocoa industry in Ghana.

ANTHONY FOFIECHIEF EXECUTIVE


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FINANCIAL STATEMENTS30th September 2012


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Contents

Pages

BOARD OF DIRECTORS AND OFFICIALS 16

REPORT OF AUDITORS 18

STATEMENT OF COMPREHENSIVE INCOME 19

STATEMENT OF FINANCIAL POSITION 20

STATEMENT OF CHANGES IN EQUITY 21

STATEMENT OF CASH FLOWS 22

GENERAL INFORMATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 23

OTHER NOTES TO THE FINANCIAL STATEMENTS 34


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BOARD OF DIRECTORS

CHAIRMAN DR. PERCIVAL ALFRED KURANCHIE

CHIEF EXECUTIVE MR. ANTHONY FOFIE

MEMBERS MR. K. B. AMISSAH-ARTHUR

PROF. KOFI NKETSIA AFFUL

MR. PAUL ASIMENU

MRS. AFRIYIE HAFFAR

DR. AGYEMAN ATUAHENE KONTOR

NANA ADJEI DAMOAH

DR. (MRS.) BERNICE ADIKU- HELOO

MR. CHARLES TETTEH K. DODOO

SECRETARY MR. J. D. CLOTTEY-SEFA

MANAGEMENT MR. ANTHONY FOFIE CHIEF EXECUTIVE

MR. WILLIAM MENSAH DEP. CHIEF EXECUTIVE (F&A)

DR. YAW ADU-AMPOMAH DEP. CHIEF EXECUTIVE (A&QC)

MR. KWABENA ASANTE POKU DEP. CHIEF EXECUTIVE (OPS)

AUDITORS PANNELL KERR FORSTER

CHARTERED ACCOUNTANTS

FARRAR AVENUE

P. O. BOX 1219

ACCRA

JAMES QUAGRAINE & CO

CHARTERED ACCOUNTANTS

DIAGONALLY OPPOSITE LOCAL GOVERNMENT TRAINING SCHOOL

P. O. BOX 3947

ACCRA


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Report on the Financial Statements

We have audited the accompanying financial statements of Ghana Cocoa Board which comprise the statement of financial position as of September 30, 2012, the statement of comprehensive income, statement of changes in equity, and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes.

Directors’ Responsibility for the Financial Statements

The Directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards and in the manner required by the Companies Code, 1963 (Act 179) and the Ghana Cocoa Board Law 1984 (PNDCL.81) This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

We have not sighted the Title Deeds of some of the Land and Buildings and Sheds as stated in the Board’s books to establish the ownership of these assets.

In our opinion, subject to the matter mentioned above, the financial statements give a true and fair view of the financial position of Ghana Cocoa Board as of September 30, 2012, and of its financial performance and its cash flows for the year then ended in accordance with the Ghana Cocoa Board Law 1984 (PNDCL. 81), International Financial Reporting Standards and comply with the Companies Code, 1963 (Act 179).Report on other Legal and Regulatory Requirements

Independent Auditors’ Report to the Members of Ghana Cocoa Board


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1. The Ghana Cocoa Board Law 1984 (PNDC L.81): The Board has not complied with Section 26(1) of the Ghana Cocoa Board Law 1984 (PNDCL. 81)

which requires the Board to establish a contributory insurance scheme for Cocoa, Coffee and Shea nut farmers within the framework of the Social Security Scheme.

The Board has with effect from the 2009/2010 financial year approved the establishment of the insurance scheme and a technical committee has since been set up in January 2010 for its implementation.

2. The Ghana Companies Code, 1963, (Act 179) requires that in carrying out our audit we consider and report to you on the following matters. We confirm that:

i) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit.

ii) In our opinion proper books of accounts have been kept by the Board, so far as appears from our examination of those books, and

iii) The statement of financial position and statement of comprehensive income of the Board are in agreement with the books of accounts.

…………………………………. P K F CHARTERED ACCOUNTANTSFARRAR AVENUEACCRA

7TH FEBRUARY, 2013

Independent Auditors’ Report to the Members of Ghana Cocoa Board, cont’d.


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Statement of Comprehensive Income

2012 2011

Notes GH¢ GH¢

Gross Turnover 2 4,619,210,810 4,754,198,210

Operating Cost

Cost of Sales 3 4,403,222,536 4,407,622,199

Admin. & General Expenses 4 385,133,105 343,623,646

4,788,355,641 4,751,245,845

Operating (Loss) / Profit (169,144,831) 2,952,365

Other Income 5 230,208,864 155,552,883

Profit before Appropriations 61,064,033 158,505,248

Export and Local Duty 22 (76,000,000) (148,679,011)

Net (Loss) Profit for the Year Transferred to Income Surplus Account (14,935,967) 9,826,237

OTHER COMPREHENSIVE INCOME

Net change in fair value of available for sale financial assets:

Revaluation Loss recognised directly in equity 19 (8,139,519) (5,578,503)

Total Comprehensive Income for the Year (23,075,486) (4,247,734)


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2012 2011Notes GH¢ GH¢

Non-Current Assets

Property, Plant and Equipment 7 454,664,272 349,270,472 Plantations Development 6 0 0Loans and Investments 8 18,340,973 25,988,999

473,005,245 375,259,471

Current Assets

Inventories 9 469,111,499 378,194,717 Amounts Due from Subsidiary Company 10 481,556,370 7,038,898 Accounts Receivable 11 888,400,660 1,038,976,194 Cash and Bank Balances 12 720,751,822 320,861,639

2,559,820,351 1,745,071,448

Current Liabilities

Short Term Loan-Cocoa Bills 13 1,564,252,467 1,508,907,594 Accounts Payable 14 885,684,000 379,959,019 Loans 15 3,561,400 3,561,400

2,453,497,867 1,892,428,013

NET CURRENT ASSETS / (LIABILITIES) 106,322,484 (147,356,565)

579,327,729 227,902,906 Deferred Income 16 (25,501,705) (24,784,001)Medium Term Loan 24 (377,740,000) 0

Net Assets 176,086,024 203,118,905

Financed By:

Ghana Government Investment 393,290 393,290 Income Surplus 17 104,192,871 119,128,838 Special Funds 18 95,719,145 99,676,540 Revaluation Loss 19 (24,219,282) (16,079,763)

176,086,024 203,118,905

These financial statements were approved by the Board of Directors

on 7th February, 2013.

..……………………………… Chairman ……………………………. Chief Executive

Statement of Financial Position


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Statement of Changes in Equity

Ghana

Government

Investment

Revaluation Special Income2012 Loss Funds Surplus Total

GH¢ GH¢ GH¢ GH¢ GH¢

Balance at 1 October 2011 393,290 (16,079,763) 99,676,540 119,128,838 203,118,905

Loss for the year 0 0 0 (14,935,967) (14,935,967)

Revalution Loss on Available for Sale

Investments 0 (8,139,519) 0 0 (8,139,519)Total Comprehensive Income 0 (8,139,519) 0 (14,935,967) (23,075,486)

Appropriations to Farmers’ Welfare Fund 0 0 (980,000) 0 (980,000)

Transfer to Farmers’ Welfare Fund 0 0 0 0 0

Appropriations to Farmers’ Equalization

Fund 0 0 0 0 0

Stabilisation Fund 0 0 0 0 0

Farmers’ Pension Scheme 0 0 0 0 0

Net Movement on Cocoa Sweepings &

Sample Residue Fund 0 0 (2,977,395) 0 (2,977,395)

Balance at 30 September 2012 393,290 (24,219,282) 95,719,145 104,192,871 176,086,024

2011

Balance at 1 October 2010 393,290 (10,501,260) 79,894,895 165,251,528 235,038,453

Profit for the year 0 0 0 9,826,237 9,826,237

Revalution Loss on Available for Sale

Investments 0 (5,578,503) 0 0 (5,578,503)

Total Comprehensive Income 0 (5,578,503) 0 9,826,237 4,247,734

Appropriations to Farmers’ Welfare Fund 0 0 (23,001,292) 0 (23,001,292)

Transfer to Farmers’ Welfare Fund 0 0 982,624 (982,624) 0

Appropriations to Farmers’ Equalization

Fund

0 0 (21,310,600) 0 (21,310,600)

Stabilisation Fund 0 0 28,513,359 (28,513,359) 0

Farmers’ Pension Scheme 0 0 26,452,944 (26,452,944) 0

Net Movement on Cocoa Sweepings &

Sample Residue Fund 0 0 8,144,610 0 8,144,610Balance at 30 September 2011 393,290 (10,501,260) 99,676,540 119,128,838 203,118,905


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Statement of Cash Flows

2012 2011 Notes GH¢ GH¢

Cash Flows from Operating Activities

Net (Loss) / Profit for the Year (14,935,967) 9,826,237Bank Interest and Charges 55,412,089 47,213,151Interest Received (88,039,131) (54,878,262)Depreciation 15,939,715 18,033,536Deferred Income 717,704 4,551,572Dividend Received (537,165) (440,312)Other Non Cash Adjustment (342,440) 203,648

Operating Profit before Working Capital Changes (31,785,1950) 24,509,570

Change in Stocks (90,916,782) (253,623,210)Change in Accounts Receivable 150,575,534 (653,037,954)Change in Accounts Payable 505,724,981 (91,355,879)

Net Cash Inflow / (Outflow) from Operating Activities 533,598,538 (973,507,473)

Investing Activities

Dividend Received 537,165 440,312Bank Interest and Charges (55,412,089) (47,213,151)Interest Received 88,039,131 54,878,262Change in Special Funds 0 8,144,610Appropriation to Farmers’ Welfare Fund (3,957,395) (44,311,892)Appropriation of Special Funds 0 0Decrease in Current Account with Subsidiaries (474,517,472) 40,841,716Purchase of Property, Plant and Equipment (121,482,568) (233,832,303)

Net Cash Outflow From Investing Activities (566,793,228) (221,052,446)

Financing Activities

Loan 377,740,000 2,424,085,150Loan Repayments 0 (2,424,085,150)

Net Cash Flow from Financing Activities 377,740,000 0

Increase / (Decrease) in Cash and Cash Equivalents 344,545,310 (1,194,559,919)

Cash and Cash Equivalents at 1 October (1,188,045,955) 6,513,964

Cash and Cash Equivalents at 30 September 25 (843,500,645) (1,188,045,955)


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1. GENERAL INFORMATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Corporate Information

The Ghana Cocoa Board, is a body established by the Ghana Cocoa Board Law 1984 (P.N.D.C. Law 81) and domiciled in Ghana. The Board is permitted by its regulations to carry on, inter alia, the business of encouraging the production and the cultivation of cocoa and coffee. In addition, the Board is permitted to initiate programmes aimed at controlling pests and diseases of cocoa, coffee and sheanuts, purchase, import, undertake and encourage the manufacture in Ghana of, and distribute and market inputs used in the production of cocoa, coffee and sheanuts and undertake, promote and encourage scientific research aimed at improving the quality and yield of cocoa, coffee, sheanuts and other tropical crops and regulate the marketing and export of cocoa, coffee and sheanuts, in all aspects and other businesses and agencies incidental thereto. The address of the registered office of the Board is ‘Cocoa House, Kwame Nkrumah Avenue, P. O. Box GP 933, Accra.

b. Statement of Compliance

The financial statements have been prepared in accordance with all International Financial Reporting Standards, including International Accounting Standards and interpretations issued by the International Accounting Standards Board and its committees, as required by the Institute of Chartered Accountants (Ghana). The financial statements of the Board include the results of its Divisions. However, on grounds of consistency and in accordance with the practice of the Board, the accounts of the subsidiary have not been consolidated with these financial statements.

c. Basis of Preparation

The Board’s financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS). The Financial statements have been prepared under the historical cost basis except for the following assets and liabilities that are stated at their fair values: financial instruments that are at fair value through profit or loss; financial instruments classified as available-for-sale; and property, plant and equipment.

d. Use of Estimates and Judgement

The preparation of financial statements in conformity with IFRSs requires Management to make judgement, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and the associated assumptions are based on historical experience and other factors that are reasonable under the circumstances, the results of which forms the basis of making the judgement about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and the underlying assumptions are reviewed on an ongoing basis. Revision to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

General Information and Summary of Significant Accounting Policies


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e. Summary of Significant Accounting Policies

The significant accounting policies adopted by Ghana Cocoa Board under the International Financial Reporting Standards (IFRSs) are set out below:

i. Revenue Recognition

a) Cocoa Beans

Cocoa Marketing Company Limited (CMC) (a wholly owned subsidiary of COCOBOD) was established with the sole purpose of selling cocoa beans on behalf of the Board.

Revenue in respect of cocoa beans sales is recognised upon receipt of copies of sales invoices from CMC. CMC issues sales invoices to cover cocoa purchase order from buyers.

b) Interest Income and Expense

Interest income and expenses are recognised in the statement of income for all instruments measured at amortised cost using the effective interest method.

The effective interest method is a method of calculating the amortised cost of a financial asset or a financial liability and of allocating the interest income or interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument or, when appropriate, a shorter period to the net carrying amount of the financial asset or financial liability. When calculating the effective interest rate, the Board estimates cash flows considering all contractual terms of the financial instrument but does not consider future credit losses. The calculation includes all fees paid or received between parties to the contract that are an integral part of the instrument.

Once a financial asset or a group of similar financial assets has been written down as a result of an impairment loss, interest income is recognised using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss.

ii. Financial Assets and Financial Liabilities

• CategorisationofFinancialAssetsandFinancialLiabilities

The Board classifies its financial asset in the following categories: financial assets at fair value through profit or loss; loans and receivable; and available-for-sale financial assets; and held-to-maturity investments. Financial liabilities are classified as either held at fair value through profit or loss, or amortised cost. Management determines the categorisation of its financial assets and financial liabilities at initial recognition.

• FinancialAssetsandFinancialLiabilitiesatFairValuethroughProfitorLoss

Financial asset or liability at fair value through profit or loss is a financial asset or financial liability that meets either of the following conditions:

• Held for trading A financial asset or financial liability is classified as held for trading if it is: acquired or incurred

principally for the purpose of selling or repurchasing in the near future; or part of a portfolio of

General Information and Summary of Significant Accounting Policies, Cont’d


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identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit taking.

• Designated at fair value through profit or loss

Upon initial recognition as financial asset or financial liability, it is designated by the Board as at fair value through profit or loss except for investments that do not have a quoted market price in an active market, and whose fair value cannot be reliably measured.

• LoansandReceivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.

• Available-for-saleFinancialAssets

Available-for-sale financial assets are non-derivative financial assets that are designated on initial recognition as available for sale and are held for an indefinite period of time and may be sold in response to needs for liquidity or changes in interest rates, exchange rates or equity prices.

• Held-to-maturityInvestments

Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity that the Board has the positive intention and ability to hold to maturity.

• InitialRecognitionofFinancialAssetsandFinancialLiabilities

The Board shall recognise a financial asset or financial liability on its balance sheet when, and only when, the Board becomes a party to the contractual provisions of the instrument subject to the provisions in respect of regular way purchases or sales of a financial asset which state that, ‘a regular way purchase or sale of financial assets is recognised and derecognized using either trade date or settlement date accounting’.

• DerecognitionofFinancialAssetsandFinancialLiabilities

Financial assets are derecognised when the right to receive cash flows from the financial assets has expired or where the Board has transferred substantially all the risks and rewards of ownership. Any interest in transferred financial assets that is created or retained by the Board is recognised as a separate asset.

A financial liability (or part of a financial liability) is removed from the Board’s balance sheet when, and only when, it is extinguished – i.e. when the obligation specified in the contract is: discharged; cancelled; or expired.

• InitialMeasurementofFinancialAssetsandFinancialLiabilities

When a financial asset or financial liability is recognised initially, the Board measures it at its fair value plus, in the case of a financial asset or financial liability not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability.



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When the Board uses settlement date accounting for an asset that is subsequently measured at cost or amortised cost, the asset is recognised initially at its fair value on the trade date.

• SubsequentMeasurementofFinancialAssets

After initial recognition, the Board shall measure financial assets, including derivatives that are assets, at their fair value, without any deduction for transaction costs it may incur on sale or other disposal, except for the following financial assets: loans and receivables, which shall be measured at amortised cost using the effective interest method; held-to-maturity investments, which shall be measured at amortised cost using the effective interest method; and investment in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured and derivatives that are linked to and must be settled by delivery of such unquoted equity instruments, which shall be measured at cost.

• SubsequentMeasurementofFinancialLiabilities

After initial recognition, the Board shall measure all financial liabilities at amortised cost using the effective interest method, except for: financial liabilities at fair value through profit or loss. Such liabilities, including derivatives that are liabilities, shall be measured at fair value except for a derivative liability that is linked to and must be settled by delivery of an unquoted equity instrument whose fair value cannot be reliably measured, which shall be measured at cost; and financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or is accounted for using the continuing involvement approach.

• GainsandLosses

The Board shall recognise a gain or loss arising from a change in the fair value of a financial asset or financial liability that is not part of a hedging relationship as follows: a gain or loss on a financial asset or financial liability classified as at fair value through profit or loss shall be recognised in profit or loss; a gain or loss on an available for sale financial asset shall be recognised directly in equity, through the statement of changes in equity except for impairment losses and foreign exchange gains and losses until the financial asset is derecognized, at which time the cumulative gain or loss previously recognised in equity shall be recognised in profit or loss.

Interest calculated using effective interest method is recognised in profit or loss; dividends on an available-for-sale equity instrument are recognised in profit or loss when the Board’s right to receive payment is established;

For financial assets and financial liabilities carried at amortised cost, a gain or loss is recognised in profit or loss when the financial asset or financial liability is derecognised or impaired, and through the amortization process.

• AmortisedCostMeasurement

The amortised cost of a financial asset or financial liability is the amount at which the financial asset or financial liability is measured at initial recognition, minus principal repayment, plus or minus the cumulative amortisation using the effective interest method of any difference between the initial amount recognised and the maturity amount, minus any reduction for impairment.



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• FairValueMeasurement

The determination of fair values of quoted financial assets and financial liabilities in active markets are based on quoted market prices or dealer price quotations. If the market for a financial asset or a financial liability is not actively traded or is an unlisted security, the Board establishes fair value by using valuation techniques. These techniques include the use of arms’ length transactions, discounted cash flow analysis, and valuation models and techniques commonly used by market participants.

The value produced by a model or other valuation technique may be adjusted to allow for a number of factors as appropriate, because valuation techniques cannot appropriately reflect all factors that market participants take into account when entering into a transaction. Management believe that these valuation adjustments are necessary and appropriate to fairly state financial instruments carried at fair value in the balance sheet.

• Offsetting

Financial assets and financial liabilities are set off and the net amount presented in the balance sheet when, and only when, the Board has a legal right to set off the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

Income and expenses are presented on the net basis only when permitted by the accounting standards or interpretation, or for gains and losses arising from a group of similar transactions such as in the Board’s trading activity.

• MeasurementofImpairmentandProvisionforCreditLosses

The Board shall assess at each balance sheet date, whether there is any objective evidence that a financial asset or group of financial assets is impaired.

A financial asset or group of financial assets is impaired and impairment losses are incurred if, and only if, there is objective evidence of impairment as a result of one or more events that occurred after initial recognition of the asset (a loss event) and that loss event(s) has an impact on the estimated future cash flows of the financial assets or group of financial assets that can be reliably estimated. It may not be possible to identify a single, discrete event that caused the impairment. Rather, the combined effect of several events may have caused the impairment. Objective evidence that a financial asset or group of financial assets is impaired includes observable data that comes to the attention of the Board about the following loss events:

• significant financial difficulty of the issuer or the obligor;

• a breach of contract, such as a default or delinquency in interest or principal payment;

• the lender (the Board), for economic or legal reasons relating to the borrower’s financial difficulty, granting to the borrower a concession that the Board would not otherwise consider;

• it is becoming probable that the borrower will enter bankruptcy or other financial reorganization;



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• the disappearance of an active market for that financial asset because of financial difficulties; or observable data indicating that there is a measurable decrease in the estimated future cash

flows from a group of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with individual financial assets in the group, including:

• adverse changes in the payment status of borrowers in the group (e.g. an increased number of delayed payments); or

• national or local economic conditions that correlate with defaults in the group (e.g. an increase in the unemployment rate in the geographical area of the borrowers, a decrease in property prices for mortgages in the relevant area, a decrease in oil prices for loan assets to oil companies, or adverse changes in the industry conditions that affect the borrowers in the group).

A provision for credit losses is established if there is objective evidence that the Board will be unable to collect all amounts due on a claim according to the original contractual term. A “claim” means a loan, a commitment such as a letter of credit, guarantee or commitment to extend credit or other credit product.

An allowance for credit loss is reported as a reduction in carrying value of a claim on the balance sheet, whereas for an off-balance sheet item such as a commitment, a provision for credit loss is reported in other liabilities. Additions to provisions for credit losses are made through credit loss expense.

Provision for credit losses is based on the following principles:

Counterparty-specific – A claim is considered as a loss when management determines that it is probable that the Board will not be able to collect all amounts due according to the original contractual terms.

Individual credit exposures are evaluated based on the borrower’s character, overall financial condition, resources and payment record, prospects of support from financially responsible guarantor and cash collaterals.

An impaired asset refers to an asset where there is no longer reasonable assurance of timely collection of the full amount of principal and interest due to deterioration in the credit quality of the counterparty. An asset is impaired if the estimated recoverable amount of an asset is less than its carrying amount shown in the books of the Board. Impairment is measured and a provision for credit losses is established for the difference between the carrying amount and its estimated recoverable value.

Estimated recoverable amount is measured by discounting the expected future cash flows at the effective interest rate inherent in the asset. When the amount and timing of future cash flows cannot be estimated with reasonable reliability, estimated, recoverable amounts may be measured at either:

• The fair value of any security underlying the assets, net of expected costs of recovery and any amount legally required to be paid to the borrowers; or



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• Observable market prices for the assets.

Upon impairment the accrual of interest income based on the original terms of the claim is discontinued until the asset has been written down to its estimated recoverable amount. Interest income thereafter is recognized.

A write-off is made when all or part of a claim is deemed uncollectible or forgiven. Write-offs are charged against previously established allowances for credit losses or directly to credit loss expense and reduce the principal amount of a claim.

iii. Loans and Advances

Loans and advances originated by the Board include loans where money is provided directly to the borrower and are recognized when cash is advanced to the borrower. They are initially recorded at cost, which is fair value of cash originated by the Board, including any transaction costs, and are subsequently measured at amortised cost using the effective interest method.

iv. Investments

Investments are recognized on a trade date basis and are classified as held to maturity or available for sale. Investments with fixed maturity dates, where management has both the intent and ability to hold to maturity are classified as held to maturity. Investments intended to be held for indefinite period of time, which may be sold in response to needs for liquidity or changes in the market, are classified as available for sale.

Investments are initially measured at cost. Available for sale investments are subsequently re-measured at fair value based on quoted prices. Fair values for unlisted securities are estimated using market values of the underlying securities or appropriate valuation methods.

Held to maturity investments are carried at amortised cost less any provision for impairment. Amortised cost is calculated on the effective interest method.

v. Property, Plant and Equipment

Up to 28th February 1965 it had been the policy of the Board to write off all additions to Property, Plant and Equipment in the year of purchase. All additions since that date are stated at cost less accumulated depreciation and impairment losses. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount of assets is the greater of their net selling price and value in use. The impairment losses are recognized in the statement of income.

Depreciation is computed using the straight-line method, at the following annual rates:

Leasehold Land and Building 2%Cocoa and Coffee Sheds 10%Furniture and Equipment 20%Motor Vehicle 25%Plant and Machinery 20%Tractors 25%



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Repairs and maintenance are charged to the income statement when the expenditure is incurred. Improvements to Property, Plant and Equipment are capitalized.

Gains and losses on disposal of fixed assets are determined by reference to their carrying amount and are taken into account in determining net income.

vi. Translation of Foreign Currencies

The Board’s functional currency is the Ghana Cedi. In preparing the balance sheet of the Board, transactions in currencies other than Ghana Cedis are recorded at the rates of exchange prevailing on the dates of the transactions. At each balance sheet date, monetary items denominated in foreign currencies are retranslated at the rates prevailing at the balance sheet date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in the statement of income. Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in the statement of income for the period except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised directly in shareholders’ equity. For such non-monetary items, any exchange component of that gain or loss is also recognised directly in the shareholders’ equity.

vii. Cash and Cash Equivalents

For the purposes of cash flow statement cash and cash equivalents include cash, non-restricted balances with Bank of Ghana, amounts due from other banks and financial institutions and short term government securities maturing in three months or less from the date of acquisition.

viii. Leases

Leases are tested to determine whether the lease is finance or operating lease and treated accordingly.

Finance leases - leases of property, plant and equipment where the Board has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at inception of the lease at the lower of the fair value of the lease property, plant and equipment and the present value of minimum lease payments. Each lease payment is allocated between the liability and finance charges so as to achieve a constant periodic rate of interest on the remaining balance of the liability for each period. The corresponding rental obligations, net of finance charges, are included on other long term borrowings. The interest element of the finance cost is charged to the income statement over the lease period. The property, plant and equipment acquired under finance leases is depreciated over the shorter of the useful life of the asset or the lease term.

Operating leases – leases where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating lease. Rentals payable under operating leases are charged to income statement on a straight- line basis over the term of the relevant lease. Benefits received and receivable as an incentive to enter into operating lease are also spread on a straight-



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line basis over the lease term.

ix. Provision

Provisions for restructuring costs, legal claims and similar events are recognised when: the Board has a present legal or constructive obligation as a result of past events; it is more likely that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated.

x. Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost. Any difference between the amount initially recognised (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest rate method.

Borrowings are classified as non-current liabilities where the Board has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.

xi. Inventories

Inventory is stated at the lower of cost or net realisable value. Costs of inventories includes, the purchase price, and related transport and handling costs. In general, cost is determined on a first in first out basis. Provision is made for obsolete, slow-moving and defective stocks.

xii. Accounts Receivable

These are shown at amortised cost, which is, the invoiced value, less a provision in respect of impairment losses.

xii. Impairment of Non-financial Assets

The carrying amount of the Board’s non-financial assets other than deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists then the assets recoverable amount is estimated.

An impairment loss is recognised if the carrying amount of an asset exceeds its recoverable amount. The recoverable amount of an asset is the greater of its value in use and its fair value less costs to sell. Impairment losses are recognised in the income statement.

Impairment losses recognised in prior periods are assessed at each reporting date for any indication that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the assets carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

xiv. Employee Benefits

• DefinedContributionPlans

Defined contribution plans are post-employment benefit plans under which the Board pays fixed contributions into a separate fund and has no legal or contractual obligation to pay further



32

contributions if the fund does not hold sufficient asset to pay all employee benefits relating to employee service in the current and prior periods.

Obligation for contributions to defined contribution plans are recognised as an expense in the income statement when they are due.

• Short-TermBenefits

Short-term employee benefits are amounts payable to employees that fall due wholly within twelve months after the end of the period in which the employee renders the related service.

The cost of short-term employee benefits are recognised as an expense in the period when the economic benefit is given, as an employment cost. Unpaid short-term employee benefits as at the end of the accounting period are recognised as an accrued expense and any short-term benefit paid in advance are recognised as prepayment to the extent that it will lead to a future cash refund reduction in future cash payment.

Wages and salaries payable to employees are recognised as an expense in the income statement at gross. The Board’s contribution to social security fund is also charged as an expense.

• Termination Benefits

Termination benefits are recognised as an expense when the Board is demonstrably committed, without realistic possibility of withdrawal, to a formal detailed plan to terminate employment before the normal retirement date. Termination benefits for voluntary redundancies are recognised if the Board has made an offer encouraging voluntary redundancy, it is probable that the offer will be accepted, and the number of acceptance can be estimated reliably.

xv. Events after the Balance Sheet date

The Board adjusts the amounts recognised in its financial statements to reflect events that provide evidence of conditions that existed at the balance sheet date.

Where there are material events that are indicative of conditions that arose after the balance sheet date, the Board discloses, by way of note, the nature of the event and the estimate of its financial effect, or a statement that such an estimate cannot be made.

xvi. Grants

Certain Institutions and former Government Departments, which became the responsibility of the Board from 1 October, 1972 are advanced sums of money by the Board on the basis of budgets submitted to it. Such advances are treated as grants and are written off in the Income Statement.

xvii. Investment Income

Income from investment in Ghana Government Stocks and Loans as well as dividends receivable from the subsidiary is treated on a cash basis in the financial statements.



33

f. New Standards and Interpretation not yet adopted

A number of new standards, amendments to standards and interpretations are not yet effective for the year ended 30 September 2009, and have not been applied in preparing these financial statements. These are disclosed as follows:

(i) IFRS 3, this standard requires all future transaction cost relating to business combinations to be expensed and contingent purchase consideration recognized at fair value at acquisition date. For successive share purchases, any gain or loss for the difference between the fair value and the carrying amount of the previously held equity interest in the acquire must be recognized in profit and loss. It is not expected to have any impact on the Board’s financial statements.

(ii) IFRS 7 Disclosures — Offsetting Financial Assets and Financial Liabilities — Amendments to IFRS 7 These amendments require an entity to disclose information about rights to set-off and related arrangements (e.g., collateral agreements). The disclosures would provide users with information that is useful in evaluating the effect of netting arrangements on an entity’s financial position. The new disclosures are required for all recognised financial instruments that are set off in accordance with IAS 32 Financial Instruments: Presentation. The disclosures also apply to recognised financial instruments that are subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are set off in accordance with IAS 32. These amendments will not impact the Company’s financial position or performance and will become effective for annual periods beginning on or after 1 January 2013.

(iii) IFRS 8 Operating Segments introduces the “management approach” to segment reporting. IFRS 8, which becomes mandatory for the Board’s 2009 financial statements, will require the disclosure of segment information based on internal reports regularly reviewed by the Board’s Chief Operating Decision maker in order to assess each segment’s performance and to allocate resources to them. The Board is yet to implement this standard.

(iv) IAS 27 Separate Financial Statements (as revised in 2012) As a consequence of the new IFRS 10 and IFRS 12, what remains in IAS 27 is limited to accounting for

subsidiaries, jointly controlled entities and associates in separate financial statements. The Company does not present separate financial statements. The amendment becomes effective for annual periods beginning on or after 1 January 2013.



34

Notes to the Financial Statements for the Year Ended 30 September 2012

2012 2011

2. TURNOVER GH¢ GH¢

Cocoa Beans:-

Export 3,936,471,192 3,894,178,851

Local 682,739,618 860,019,359

4,619,210,810 4,754,198,210

3. COST OF SALES

Cocoa Beans

Opening Stock 316,292,700 42,432,762

Purchases 3,395,627,879 3,608,999,248

3,711,920,579 3,651,432,010

Closing Stock (389,000,210) (316,292,700)

3,322,920,369 3,335,139,310

Sales Expenses 1,080,302,167 1,072,482,889

4,403,222,536 4,407,622,199


35


2012 2011

GH¢ GH¢

4. ADMIN. AND GENERAL EXPENSES

Staff Cost 215,019,930 205,775,996

Financial Cost 55,412,089 47,213,151

Office Cost 14,115,987 12,321,901

General Expenses 7,492,773 6,025,089

Estate and Property Maintenance 26,631,172 17,695,421

Depreciation 15,939,715 18,033,536

Auditors Remuneration 180,000 180,000

Extension and Research Cost 2,710,873 3,053,433

Field Operation Cost 47,630,566 33,325,119

385,133,105 343,623,646

5. OTHER INCOME

This is made up as follows :

Dividend Received 537,165 440,312

Interest Received 88,039,131 54,878,262

Sundry Sales 1,056,024 490,851

Rent Received 1,398,458 562,151

Interest on Staff Loans 1,186,605 1,499,588

Cocoa Clinic 10,187,609 8,530,088

Office Rent 933,542 932,128

Other Sundry Income 33,181,309 18,010,439

Grading and Sealing of Cocoa 93,689,021 70,209,064

230,208,864 155,552,883

6. PLANTATIONS DEVELOPMENT

This comprises expenditure on Cocoa and Coffee Plantations under development in various regions of the country. The plantations were managed by Cocoa Board Plantations Limited, a fully owned subsidiary of Ghana Cocoa Board. Cocoa Board Plantations Limited has been put into liquidation and the plantations have been taken over by the Divestiture Implementation Committee.

A full provision has been made for the non recovery of the accumulated developmental expenditure of GH¢1,107,700 incurred.


36


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37


2012 2011

GH¢ GH¢

8. Loans and Investments

a Loans

Staff Home Ownership 2,397,025 1,905,532

b Investments

Cocoa Marketing Company (Gh.) Limited 13 13

Tema Chemicals Limited 36 36

Aluworks Limited 2,234,834 6,257,536

Cocoa Processing Company Limited 2,393,512 7,180,537

Ghana Oil Company Ltd. 137,693 80,112

Abuakwa Formulation Plant 1,372 1,372

West African Mills Company Limited 371,524 371,524

HFC Bank Limited 7,422,264 5,937,812

State Insurance Company 182,700 238,525

Ghana Commercial Bank Limited 3,200,000 4,016,000

15,943,948 24,083,467

Total 18,340,973 25,988,999


38


2012 2011 GH¢ GH¢

9. INVENTORIES

Cocoa Beans 389,000,210 316,292,700Cocoa Bags and Twines 5,821,355 11,943,328Chemicals and Insecticides 40,183,546 34,821,742Goods in Transit 24,801,786 6,049,512Maintenance and Others 10,077,496 9,860,329

469,884,393 378,967,611Provision for Obsolescence (772,894) (772,894)

469,111,499 378,194,717

10. AMOUNTS DUE FROM SUBSIDIARY COMPANY

These include the following :

Cocoa Marketing Company (Gh). Limited 481,556,370 7,038,898

11. ACCOUNTS RECEIVABLE AND PREPAID EXPENSES

Amounts due from Officers (Note 11a) 37,226,192 22,222,144Prepaid Expenses (Note 11b) 9,243,165 8,686,784Trade Debtors 375,186,385 597,789,518Cocoa Processing Company Limited 109,828,815 141,552,042Plot Commodities 65,892,647 58,135,717Loan (Note 11c) 233,994,000 233,994,000WAMCO 104,939,053 24,505,586

936,310,257 1,086,885,791Provision for Doubtful Debts (47,909,597) (47,909,597)

888,400,660 1,038,976,194

a. The maximum indebtedness of the officers of the Board at any time amounted to GH¢ 37,226,192 (2011- GH¢22,222,144). This is mainly in respect of vehicle and home-ownership loans. b. These represent the unexpired portion of certain expenditure spread on a time basis. c. The Loan was given to the Ministry of Finance as a result of Cocoa Bills issued by the Bank of Ghana. Ghana Cocoa Board is expecting the loan to be repaid by the Ministry of Finance. The Government has since paid all the Loan amount.


39


2012 2011

GH¢ GH¢

12. CASH AND BANK BALANCES

Cash and Bank Balances 447,574,672 152,836,301

Fixed Deposits 273,177,150 168,025,338

720,751,822 320,861,639

13. SHORT TERM LOAN

These represent Cocoa Bills issued by the Bank of Ghana on behalf of the Board.

14. ACCOUNTS PAYABLE

Included in these are the following :

Retention on Contracts 4,619,225 4,732,909

Payroll Deductions 6,073,268 1,118,929

Other Accounts Payable & Accrued Expenses 874,991,507 374,107,181

885,684,000 379,959,019

15. LONG TERM LOANS Balances Repayment Exchange Balance

10/01/2011 Drawings During Year Variation 30/9/2012

GH¢ GH¢ GH¢ GH¢ GH¢

E. C. G. D. 6,500 0 0 0 6,500

IDA/Consultancy 156,600 0 0 0 156,600

IDA/ERP 625,000 0 0 0 625,000

E. E. C. 8,200 0 0 0 8,200

ODA 324,300 0 0 0 324,300

IDA 1854-GH 951,900 0 0 0 951,900

ADB Loan 1,179,100 0 0 0 1,179,100

CIDA Fund 109,700 0 0 0 109,700

BADEA LOAN 174,300 0 0 0 174,300

IDA 2180-GH 25,800 0 0 0 25,800

3,561,400 0 0 0 3,561,400

No provision has been made for the interest accrued on the IDA Credit 1435-GH and 1436-GH.


40


b. ECGD Loan

This represents an ECGD Loan to the Board during 1981 for the purchase of motor vehicles and spare parts.

The terms of the loan are as follows :

i. 5% of total price of goods to be paid within 30 days of signing the agreement.

ii. 10% of the invoice price of each shipment payable upon presentation of shipping documents and

iii. 85% of the invoice price of each shipment payable in 10 consecutive half yearly instalments.

c. IDA Credit 1436 - GH (Consultancy)

International Development Association credit of Special Drawing Rights (SDR), in various currencies equivalent to US$4,417 million, made available to the Republic of Ghana in 1984.

The Government of Ghana re-lent the amounts to Ghana Cocoa Board in cedis. The loan is to be repaid in 30 equal semi-annual instalments commencing 1 May 1989. Interest is at the rate of 12.5% per annum.

d. IDA Credit 1435 - GH and SF-9

International Development Association credit of Special Drawing Rights (SDR), equivalent to US$24.323 million made available to the Republic of Ghana.

The Government of Ghana re-lent the proceeds of the Loan to the Ghana Cocoa Board in cedis. The loan is to be repaid in 30 equal semi-annual instalments payable each May 1st and November 1st commencing in 1989 at an interest rate of 12.5% per annum.

e. EEC Loan

European Economic Community Loan of 2.935 million ECU. The loan was originally made available to the Republic of Ghana and re-lent to Ghana Cocoa Board.

f. ODA

The Overseas Development Association made available to the Republic of Ghana 500,000 pounds sterling in the form of aid. The amount has been re-lent to the Ghana Cocoa Board.


41


g. IDA 1854 - GH

The International Development Association (IDA) agreed to lend the Republic of Ghana in an amount in various currencies equivalent to thirty-one million three hundred thousand Special Drawing Rights (SDR 31,300,000).

The Government of Ghana has made available to the Ghana Cocoa Board as a loan an amount of SDR 11,200,000 and as a grant an amount of SDR 12,160,000.

h. ADB Loan

The African Development Bank (ADB) agreed to lend to the Republic of Ghana an amount in various currencies equivalent to nineteen million two hundred and thirty thousand Units of Accounts (US$24.6 million). The amount has been re-lent to the Ghana Cocoa Board.

i. CIDA Fund

An allocation of CDN$3.5 million under the CIDA Fund was made by the Ghana Government to the Board. The Board shall repay the cedi equivalent of this amount in monthly instalments over five months commencing February, 1990.

j. BADEA Loan

The Arab Bank for Economic Development in Africa (BADEA) agreed to lend the Republic of Ghana ten million US dollars (US$10,000,000). The amount was re-lent to the Ghana Cocoa Board.

16. DEFERRED INCOME

This represents unutilised funds for research, inputs for farmers and unamortised portion of capital grants.

17. INCOME SURPLUS

In accordance with Ghana Cocoa Board Law, 1984 (PNDCL. 81 Section 29), at the end of each financial year, after the Board has made provision for bad and doubtful debts, depreciation of assets, contributions to staff and superannuation funds and for any other contingencies, and after appropriation has been made to the Farmer’s Welfare Fund under section 27, a part of the profits of the Board remaining as directed in writing by the Minister after consultation with the directors and with the Minister responsible for Finance, shall be paid into the Consolidated Fund.

Movements during the year are set out in the Statement of Changes in Equity on page 6.


42


18. SPECIAL FUNDSBalance Additions Appropria-

tions Etc.Balance

1/10/2011 to Funds 30/9/2012GH¢ GH¢ GH¢ GH¢

Farmers’ Welfare Fund 1,321,924 0 (980,000) 341,924Staff Welfare Fund 37,500 0 0 37,500Depreciation Fund 100 0 0 100Housing Loan Fund 3,400 0 0 3,400Capital Fund 69,800 0 0 69,800World Food Programme 46,759 0 0 46,759Crown Agents 39,400 0 0 39,400Investment Fund 500 0 0 500Stabilisation Fund 63,155,140 0 0 63,155,140Cocoa Sweepings & Sample Residue Fund 8,549,073 0 (2,977,395) 5,571,678Farmers’ Equalisation Fund 0 0 0 0Farmers’ Social Security Fund 26,452,944 0 0 26,452,944

99,676,540 0 (3,957,395) 95,719,145

i. Farmers’ Welfare Fund

The Board is required under Section 27 (PNDCL. 81) to transfer to a Farmers’ Welfare Funda sum of money not exceeding ten per centum of the net profit of the Board for each financialyear. The Fund is to be used to finance development projects in cocoa, coffee and sheanutproducing areas; and the provision of other benefits to farmers such as low interest bearingloans, refresher courses, scholarships for farmers’ wards, and for other arrangements aimed at enhancing the welfare of cocoa, coffee and sheanut farmers.

ii. Staff Welfare Fund

This represents the balance of the Fund created under the Ghana Cocoa Marketing Instrument,1970 before the enactment of the Ghana Cocoa Board Law 1984 (PNDCL. 81).

iii. Depreciation Fund

Section 28(i) of the Ghana Cocoa Board Law (PNDCL. 81) requires the board to pay the amountsprovided for depreciation into a Special Account with such commercial banks as the Board may determine. As in the Board’s opinion, the amounts set aside for depreciation can be better invested within the organisation and no amounts have been deposited with such commercial banks.


43


iv. World Food Programme

This represents funds from the Ghana Government under the World Food Programme for the construction of staff bungalows for agriculture extension officers at various regions as part of the Cocoa Sector Rehabilitation Programme.

v. Housing Loan Fund

This represents the total amount voted by management out of :

a) Interest on Fixed Investments b) Uninvested portion of funds from the Staff Superannuation Scheme.

vi. Capital Fund This represents the original balance in foreign exchange on the Crown Agent Account which

was taken over from WACRI. The movement on the account is in respect of interest income and exchange rate adjustments.

vii. FARMERS EQUALISATION FUND

This represents the amount set aside for the payment of farmers bonus.

viii. Cocoa Sweepings and Sample Residue Fund

One of the main objectives of the Board is to ensure the maintenance of high quality of cocoa. To achieve this, Quality Control Division (QCD) is mandated to check-sample every consignment of sealed cocoa evacuated by the License Buying Companies (LBCs). The sweepings and sample residue are the samples collected and used to check the quality of cocoa beans at the take over centres prior to shipment. Confiscated cocoa beans are non graded or sealed cocoa that have been stolen or suspected to have been tampered with and delivered at the ports. These beans are rebagged and later sold. Proceeds from the sale of this residue are shared equally among Ghana Cocoa Board, CMC, QCD and the LBCs concerned.

ix. Quality Control Division Research Laboratory Fund

This fund was set up from the amount of US $500,000 received from Green View International Company Limited as a compensation to the Board for the relocation of the QCD laboratory at Tema.

iix. Stabilisation Fund

This fund is set up by the Board to ensure that prices paid to farmers are maintained even if prices of cocoa fluctuate on the International market.

iiix. Farmer’s Social Security Scheme

This was established in compliance with the Ghana Cocoa Board Law 1984 (PNDCL . 81) . However the Board is yet to come out with the modalities of how farmers can benefit from it.


44


19. REVALUATION LOSS

This arose as a result of revaluation by the Board of the listed securities at current market values.

2012 2011

GH¢ GH¢

Balance at 1st October (16,079,763) (10,501,260)

Additions during the Year (8,139,519) (5,578,503)

Balance at 30th September (24,219,282) (16,079,763)

20. CAPITAL COMMITMENTS

Capital expenditure contracted but not provided for in the financial statements as at 30 September, 2012 amounted to 93,500,000 GH Cedis (2011 - 95,500,000 GH Cedis).


45


21. TAXATION

In accordance with Section 10 (I) (i) of the Internal Revenue Act, 2000 (Act 592) and PNDCL. 81, the Board is exempted from Income Tax.

22. EXPORT AND LOCAL DUTY

This is the Government share of net FOB of Cocoa Sales.

23. CONTINGENT LIABILITIES

At the balance sheet date there were contingent liabilities not provided for in these accounts as follows:

2012 2011GH¢ GH¢

Pending Litigation 7,500,000 4,500,000

2012 2011GH¢ GH¢

24. MEDIUM TERM LOAN

Amount Drawn 377,740,000 2,424,085,150Repayment 0 (2,424,085,150)

377,740,000 0 Balance at 30 September 377,740,000 0

The Ghana Cocoa Board contracted a Medium Term Loan facility of USD 200 million in January 2012 for the 2011/2012 cocoa purchases with five Banks namely, Barclays Bank of Ghana, Standard Bank plc, Sumitomo Mitsui Banking Corporation, The Bank of Tokyo Mitsubishi UFJ, Ltd and Ghana International Bank Plc. The facility is for three years with a one year moratorium.

25. ANALYSIS OF CASH AND CASH EQUIVALENT

Bank and Cash Balance 720,751,822 320,861,639

Cocoa Bills (1,564,252,467) (1,508,907,594) (843,500,645) (1,188,045,955)

Documents

Ghana Cocoa Board Board Annual Report 2012 final 4... · Ghana Cocoa Board 43nd Annual Report & Financial Statements for the Year Ended September 2012 3 Chief Executive’s Report