Company registration number: 04627098
Registered charity number: 1098392
Opportunity Microfinance Investments Limited
A company limited by guarantee
Report and financial statements
For the year ended 31 December 2021
Opportunity Microfinance Investments Limited
Report and financial statements 2021
Contents
| Page | |
|---|---|
| Trustees’ report | 1 |
| Independent auditor’s report | 6 |
| Statement of financial activities | 11 |
| Balance sheet | 13 |
| Notes to the financial statements | 14 - 21 |
Opportunity Microfinance Investments Limited
Trustees’ report Year ended 31 December 2021
The trustees of Opportunity Microfinance Investments Limited (hereafter OMIL, registered company number 04627098 and registered charity number 1098392), who are also the directors for the purposes of company law, present their report and financial statements for the year ended 31 December 2021.
Reference and administration
Principal and registered office
Opportunity Microfinance Investments Limited Angel Court 81 St Clements Oxford OX4 1AW
Auditor
Mazars LLP Chartered Accountants and Registered Auditor The Pinnacle 160 Midsummer Boulevard Milton Keynes MK9 1FF
Trustees
The trustees of OMIL who served throughout the year and to the date of approval of this report, except where indicated, were as follows:
John Ford (Chairman) Cliff Hampton Roger Witcomb Hywel Rees-Jones
Governing document
OMIL is a charitable company wholly owned by Opportunity International United Kingdom (hereafter Opportunity International) and is governed by its Memorandum and Articles of Association dated 13 December 2002.
Organisational structure
OMIL is a 100% owned subsidiary of Opportunity International, the governance and day to day operations are managed by the Chief Executive and staff of Opportunity International.
The Board of Trustees administer OMIL. The Board have been meeting regularly in 2021. All of the current board members are also trustees of Opportunity International.
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Opportunity Microfinance Investments Limited
Trustees’ report Year ended 31 December 2021
OMIL’s parent company, Opportunity International, has taken out trustees’ indemnity insurance on behalf of the trustees.
Appointment of trustees
The trustees have control of OMIL and its property and funds. The trustees, when complete, consist of at least three and not more than 15 individuals, all of whom are the directors of OMIL.
One third (or the number nearest to one third) of the trustees retire at each AGM; those longest in office retiring first and the choice between any of equal service being made by drawing lots; however, a retiring trustee who remains qualified may be reappointed for a maximum of two consecutive terms of office.
The current Board members appoint new trustees. They review the skills and experiences the Board already possesses and actively try to appoint new trustees with additional skills and experience.
Induction and training of trustees
Potential new trustees are reviewed by the Opportunity International Board development committee and may then subsequently be asked to attend a Board of Trustees’ meeting where they meet trustees and key staff of Opportunity International. At the following trustees’ meeting, the potential new trustee is nominated and seconded and providing that all trustees agree, the individual becomes a new trustee.
The new trustee’s induction is made by the Chairman and Chief Executive of Opportunity International at a further meeting where the new trustee is introduced to his or her legal obligations, the content of the Memorandum and Articles of Association, the committee and decision making process, the strategy and the recent financial performance of OMIL.
Relationship with other organisations
OMIL’s parent charitable company, Opportunity International is a member of the Opportunity International Network (OIN), a global association of Christian organisations dedicated to providing opportunities for people in poverty to allow them to transform their lives.
Opportunity International is one of five Support Members (others are in Australia, Canada, Germany and the United States of America) we work with members and programmes located in Africa, Asia, Eastern Europe and Latin America.
The Implementing Members share a common purpose and work in cooperation with each other to provide sustainable financial services, training and advice for poor people who wish to develop small businesses, so earning their own livelihood and securing their future.
The OIN envisions a world in which poor people are able to access the financial services they need to lift themselves out of poverty. It works with people to develop their small businesses, strengthen their communities and transform their lives by
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Opportunity Microfinance Investments Limited
Trustees’ report Year ended 31 December 2021
supporting member organisations that provide sustainable financial and developmental services in a way that fosters economic, social and spiritual growth.
We are motivated by our Christian faith and we work with people to transform their lives through microfinance, regardless of their race, gender or religious affiliation. Six core values guide the way we do our work: commitment to the poor, humility, respect, integrity, stewardship, and transformation.
Risk management
The trustees of OMIL’s parent, Opportunity International, have a risk management strategy which includes an annual review of the risks that OMIL may face, the establishment of systems and procedures to mitigate those risks and the implementation of procedures designed to minimise any potential impact on OMIL should those risks materialise.
Objectives and activities
OMIL is the investment vehicle of Opportunity International. OMIL was established to achieve the general objective of Opportunity International which is to relieve poverty abroad, in particular by assisting poor persons in the establishment of small businesses and by providing temporary support to small businesses owned by and primarily employing poor persons where there is otherwise insufficient alternative employment to relieve their poverty.
Specific objective
OMIL’s specific objective is to invest in the Implementing Members that impact the most lives, these are mostly in Africa. During 2020, OMIL’s convertible loan in Opportunity International Savings and Loans Limited (OISL) in Ghana was converted to shares increasing the shareholding to 27%. During 2021 to 2021 OMIL has been gifted shares of 4% by Opportunity International United States (Support Member) in the Opportunity Bank Uganda Limited (OBUL) a further £70,000 equity transfer from OMIL, in 2021, increased this shareholding to 5%.
OMIL invested in convertible loans to Sinapi Aba Savings and Loans Limited (SASL) and Opportunity International Savings and Loans Limited (OISL), in Ghana and VFDRC (VisionFund DRC), all loans are denominated in local currency, these were revalued at the balance sheet date, resulting in an exchange loss of £38,156. Following the completion of the UKAM V Ghana and DRC project, the FCDO allowed the asset transfer hence the convertible loans to SASL and VFDRC were converted to grant, in 2021.
All the above are microfinance organisations and all investments are held primarily for charitable activities, as programme investments.
OMIL’s aims and public benefit
The trustees confirm that they have referred to the guidance contained in the Charity Commission’s general guidance on public benefit when reviewing the charity’s aims and objectives and in planning future activities for the year.
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Opportunity Microfinance Investments Limited
Trustees’ report
Year ended 31 December 2021
OMIL has a general aim to achieve its objectives and provide public benefit through investing in local member microfinance organisations in low and middle income countries.
Significant activities
During the year Opportunity International UK made a grant of £455,919 (2020: £317,299) to OMIL. This was invested in the following Implementing Members:
-
Sinapi Aba Savings and Loans Limited (SASL) £137,657;
-
Opportunity International Savings and Loans Limited (OISL) £185,004.
-
Opportunity Bank Uganda Limited (OBUL) £70,000.
-
VisionFund DRC, S.A. (VFDRC) £63,258
The convertible loans are all denominated in local currency.
Reserves policy
The restricted reserves were £2.6m and unrestricted reserves were £0.5m. OMIL is administratively supported by its parent charitable company Opportunity International the unrestricted reserves will be utilised to cover the costs of this support. As well as to provide support to Implementing Members, that OMIL invests in.
Investment policy
The investment policy follows the overall objectives of OMIL as set out above. Investments in convertible loans/debt and shares is made in OIN Implementing Members in order to achieve OMIL’s charitable objects rather than with the aim of generating income or the best investment return, as such, investments are classed as programme investments.
Prospective activities
Our 2021-25 strategy aims to provide 1.5 million poor people with access to financial services, loans, saving, insurance and training. OMIL will be supporting the broader strategy of the group to raise £15 million to deliver our core programmes of enterprise, agriculture and education to reach people currently excluded from financial services. We believe that addressing financial inclusion and giving people choice through access to secure savings and fair loans, provides sustainable routes out of poverty. Our determination is to give a hand up through access to finance and skills, not a hand out; working with microfinance institutions and banks, we are leveraging private and public resources for some of the poorest people in the world to improve incomes and create wealth. Our market-based approach develops solutions for those who have not yet been able to benefit from economic growth. Hence our focus on youth employment and business creation, on people living with a disability and on refugees. Women and girls are prioritised because they are invariably the most marginalised. We will remain targeted on sub-Saharan Africa as the region of greatest need and on rural areas where poverty is entrenched.
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Opportunity Microfinance Investments Limited
Trustees’ report Year ended 31 December 2021
Auditor
Mazars LLP have signified their willingness to continue in office and a resolution to reappoint them as auditors will be proposed at the forthcoming annual general meeting.
Statement of trustees’ responsibilities
United Kingdom Company Law applicable to incorporated charities in England and Wales requires the trustees to prepare financial statements for each financial year, which give a true and fair view of the charitable company’s activities during the year, of the surplus or deficit of the charitable company for that year and of its financial position at the year-end. In preparing financial statements giving a true and fair view, the trustees should follow best practice and:
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select suitable accounting policies and apply them consistently;
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make judgements and estimates that are reasonable and prudent;
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state whether applicable accounting standards have been followed, subject to any departures disclosed and explained in the financial statements; and
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prepare financial statements on a going concern basis unless it is inappropriate to assume that the charitable company will continue in operation.
The trustees are responsible for keeping adequate accounting records which disclose with reasonable accuracy the financial position of the charitable company and which enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
So far as the trustees are aware:
-
there is no relevant audit information of which OMIL's auditors are unaware; and
-
they have taken all the steps that they ought to have taken as trustees in order to make themselves aware of any relevant audit information and to establish that OMIL's auditors are aware of that information and that they have made such enquiries of fellow trustees and of OMIL's auditors for that purpose and taken such other steps (if any) for that purpose, as were required by their duty as trustees of OMIL to exercise due care, skill and diligence.
In preparing this report, the trustees have taken advantage of the small companies exemptions provided by section 416A of the Companies Act 2006.
Approved by the Board of Trustees and signed on behalf of the Board
John Ford (Jul 6, 2022 14:44 GMT+1)
John Ford (Chairman) 22 June 2022
5
Independent auditor’s report to the members of Opportunity Microfinance Investments Limited
Year ended 31 December 2021
Opinion
We have audited the financial statements of Opportunity Microfinance Investments Limited (the ‘charity’) for the year ended 31 December 2021, which comprise Statement of Financial Activities, the Balance Sheet and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice).
In our opinion, the financial statements:
-
give a true and fair view of the state of the charity’s affairs as at 31 December 2021 and of its income and expenditure for the year then ended;
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have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
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have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the charity in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the trustees’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charity's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the relevant sections of this report.
6
Independent auditor’s report to the members of Opportunity Microfinance Investments Limited
Year ended 31 December 2021
Other information
The other information comprises the information included in the Report of the Trustees, other than the financial statements and our auditor’s report thereon. The trustees are responsible for the other information. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
-
the information given in the Report of the Trustees which includes the Directors’ Report prepared for the purposes of company law, for the financial year for which the financial statements are prepared is consistent with the financial statements; and
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the Directors’ Report included within the Report of the Trustees has been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In light of the knowledge and understanding of the charity and its environment obtained in the course of the audit, we have not identified material misstatements in the Directors’ Report included within the Report of the Trustees.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
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adequate and proper accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
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the financial statements are not in agreement with the accounting records and returns; or
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certain disclosures of trustees’ remuneration specified by law are not made; or
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we have not received all the information and explanations we require for our audit.
7
Independent auditor’s report to the members of Opportunity Microfinance Investments Limited
Year ended 31 December 2021
- the trustees were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies’ exemption in preparing the Report of the Trustees and from the requirement to prepare a Strategic Report.
Responsibilities of Trustees
As explained more fully in the trustees’ responsibilities statement set out on page 5 the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the trustees are responsible for assessing the charity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the charity or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. Based on our understanding of the charity and its activities, we identified that the principal risks of non-compliance with laws and regulations related to the Charities Act 2011, the Charities Statement of Recommended Practice UK, health and safety regulation, anti-bribery, corruption and fraud, money laundering, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements, such as the Companies Act 2006.
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Independent auditor’s report to the members of Opportunity Microfinance Investments Limited
Year ended 31 December 2021
We evaluated the trustees’ and management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls) and determined that the principal risks were related to posting manual journal entries to manipulate financial performance, management bias through judgements and assumptions in significant accounting estimates, in particular in relation to use of restricted funds, and significant one-off or unusual transactions.
Our audit procedures were designed to respond to those identified risks, including noncompliance with laws and regulations (irregularities) and fraud that are material to the financial statements. Our audit procedures included but were not limited to:
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Discussing with the trustees and management their policies and procedures regarding compliance with laws and regulations;
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Communicating identified laws and regulations throughout our engagement team and remaining alert to any indications of non-compliance throughout our audit; and
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Considering the risk of acts by the charity which were contrary to applicable laws and regulations, including fraud.
Our audit procedures in relation to fraud included but were not limited to:
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Making enquiries of the trustees and management on whether they had knowledge of any actual, suspected or alleged fraud;
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Gaining an understanding of the internal controls established to mitigate risks related to fraud;
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Discussing amongst the engagement team the risks of fraud; and
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Addressing the risks of fraud through management override of controls by performing journal entry testing.
There are inherent limitations in the audit procedures described above and the primary responsibility for the prevention and detection of irregularities including fraud rests with management. As with any audit, there remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
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Independent auditor’s report to the members of Opportunity Microfinance Investments Limited
Year ended 31 December 2021
Use of the audit report
This report is made solely to the charity’s members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charity’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charity and the charity’s members as a body for our audit work, for this report, or for the opinions we have formed.
Vincent Marke (Jul 6, 2022 18:27 GMT+1)
Vincent Marke (Senior Statutory Auditor)
for and on behalf of Mazars LLP Chartered Accountants and Statutory Auditor The Pinnacle 160 Midsummer Boulevard Milton Keynes MK9 1FF
Date: Jul 6, 2022
10
Opportunity Microfinance Investments Limited Statement of Financial Activities (including income and expenditure account) Year ended 31 December 2021
| Note Income from: Income from parent undertaking Other income 2 2 Total Income Expenditure on: Charitable activities 3, 5 Total expenditure Net (expenditure)/income Exchange loss on convertible loans 6 Net movement in funds 5 Balances brought forward Balances carried forward 9 |
Unrestricted funds Restricted funds Total funds year ended 31st December 2021 Total funds year ended 31st December 2020 £ £ £ £ - - 455,919 - 455,919 - 317,299 312,844 |
|---|---|
| - 455,919 455,919 630,143 |
|
| (4,760) - (4,760) (890) |
|
| (4,760) - (4,760) (890) |
|
| (4,760) 455,919 451,159 629,253 - (38,156) (38,156) (93,403) |
|
| (4,760) 417,763 413,003 535,850 |
|
| 542,476 2,197,587 2,740,063 2,204,213 |
|
| 537,716 2,615,350 3,153,066 2,740,063 |
The notes on pages 14 to 21 form part of these financial statements. The Statement of Financial Activities has been prepared on the basis that all activities are continuing operations.
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Opportunity Microfinance Investments Limited Statement of Financial Activities (including income and expenditure account) Year ended 31 December 2021
Comparative Statement of Financial Activities (Including income and expenditure account) Year ended 31 December 2020
| Note Income from: Income from parent undertaking Other income 2 2 Total Income Expenditure on: Charitable activities 3, 5 Total expenditure Net incoming funds Exchange loss on convertible loans 6 Net movement in funds 5 Balances brought forward Balances carried forward 9 |
Unrestricted funds Restricted funds Total funds year ended 31st December 2020 Total funds year ended 31st December 2019 £ £ £ £ - 312,844 317,299 - 317,299 312,844 100,000 - |
|---|---|
| 312,844 317,299 630,143 100,000 |
|
| (890) - (890) (1,230) |
|
| (890) - (890) (1,230) |
|
| 311,954 317,299 629,253 98,770 - (93,403) (93,403) (377,733) |
|
| 311,954 223,896 535,850 (278,963) |
|
| 230,522 1,973,691 2,204,213 2,483,176 |
|
| 542,476 2,197,587 2,740,063 2,204,213 |
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Opportunity Microfinance Investments Limited Balance sheet As at 31 December 2021
Company registration number: 04627098
| Note Fixed Assets Programme Investments 6 Current Assets Amounts falling due in less than one year 7 Liabilities Amounts falling due within one year 8 Net Current Assets Net Assets 9 Funds Unrestricted funds 9 Restricted funds 14 9 |
As at 31st December 2021 As at 31st December 2020 £ £ 2,615,350 2,197,587 |
|---|---|
| 542,516 543,476 |
|
| (4,800) (1,000) |
|
| 537,716 542,476 |
|
| 3,153,066 2,740,063 |
|
| 537,716 542,476 2,615,350 2,197,587 |
|
| 3,153,066 2,740,063 |
The notes on pages 14 to 21 form part of these financial statements. The financial statements have been prepared in accordance with the special provisions relating to companies subject to the small companies regime within part 15 of the Companies Act 2006.
These financial statements were approved by the Board of Trustees on 22 June 2022.
Signed and authorised for issue on behalf of the Board of Trustees
John Ford (Jul 6, 2022 14:44 GMT+1)
John Ford Chairman of the board of trustees
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Opportunity Microfinance Investments Limited
Notes to the financial statement Year ended 31 December 2021
1. Accounting policies
Basis of preparation
The financial statements have been prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS102, effective 1 January 2020), Charities SORP (FRS102) and the Companies Act 2006.
FRS102 allows a qualifying entity certain disclosure exemptions, subject to certain conditions, which have been complied with, including the notification of and no objection to, the use of exemptions by the Trustees’ in preparing the financial statements, the charity has taken advantage of the following exemptions:
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from disclosing key management personnel as required by paragraph 7 of section 33 Related Party Disclosures; and
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from presenting a statement of cash flows, as required by section 7 Statement of Cash Flows; and from presenting a Net Debt Analysis.
On the basis that equivalent disclosures are given in the consolidated financial statements the charity has also taken advantage of the exemptions not to provide:
- certain disclosure requirements of section 11 Basic Financial Instruments.
Basis of accounting
The financial statements are prepared under the historical cost convention.
OMIL has not produced a profit and loss account as required under the Companies Act 2006 as the trustees consider the Statement of Financial Activities as required under the Charities Act 2011 gives a truer and fairer view of OMIL’s activities.
Going concern
The financial statements have been prepared on the going concern basis, which assumes that the charity will continue in existence for the foreseeable future. The Trustees are satisfied that the Charity has sufficient reserves to meet liabilities as they fall due and that there are no material uncertainties, in relation to going concern.
Charitable activities
Charitable activities consist of grants made from or to Opportunity International and funds sent directly to OIN’s Implementing Members for use in the provision of microfinance services.
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Opportunity Microfinance Investments Limited
Notes to the financial statement Year ended 31 December 2021
1. Accounting policies (continued)
Governance costs
Governance costs include those costs incurred for the purposes of the governance of OMIL and its assets, and are primarily associated with constitutional and statutory requirements.
Foreign currencies
Assets, liabilities, income and expenditure expressed in foreign currencies are translated into sterling at rates of exchange ruling on the dates when the transactions occur, except for:
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(i) monetary assets and liabilities which are translated at the rate ruling at the balance sheet date other than those in (ii) below; and
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(ii) transactions to be settled at a contracted rate and trading transactions covered by a related or matching forward contract, which are translated at those contracted rates.
Differences arising on the translation of such items are dealt with in the Statement of Financial Activities.
Taxation
OMIL is a charitable organisation with exemption from UK taxation on its charitable activity under section 505 of the Income and Corporation Taxes Act 1988.
Liabilities
These are the obligations of OMIL arising from past transactions or events, the settlement of which may result in the transfer or use of assets, provision of services or other yielding of economic benefits in the future.
Programme related investments
All investments are stated at cost less any provision for impairment. Investments are made in the OIN Implementing Members in order to achieve OMIL’s charitable objects rather than with the aim of generating income or the best investment return. OIN Implementing Members are locally established organisations, providing loans, insurance and savings products for poor entrepreneurs, and undertaking all expansion projects funded by Opportunity International.
An investment is considered to be impaired if its ability to assist in the delivery of OMIL’s charitable objects is diminished. Given the countries in which Opportunity International operates and the nature of its charitable purposes, valuation of assets is subject to significant variation.
Significant impairments have been made to programme related investments and convertible loans in the preceding years to ensure that programme investments are now valued in line with the expected proceeds. The programme investments continue to fulfil the charitable objects of the charity.
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Opportunity Microfinance Investments Limited
Notes to the financial statement Year ended 31 December 2021
1. Accounting policies (continued)
Unrestricted funds
All income, which does not have a restricted use as set out by the donor, and income from the sale of programme investments are accounted for as unrestricted funds.
Restricted funds
All income, which has a restricted use as set out by the donor, is separately accounted for as restricted funds.
In applying the accounting policies, the Trustees have made critical accounting judgements, estimates and assumptions about the carrying amount of the assets and liabilities. These estimates and assumptions are based on historical experience and are reviewed on a continual basis.
The critical accounting judgements, estimates and assumptions that have a material effect on the amounts recognised in the financial statements for both the current and next financial years are discussed below.
Accounting Judgements
In applying the accounting policies, the Trustees have made critical accounting judgements, estimates and assumptions about the carrying amount of the assets and liabilities. These estimates and assumptions are based on historical experience and are reviewed on a continual basis.
The critical accounting judgements, estimates and assumptions that have a material effect on the amounts recognised in the financial statements for both the current and next financial years are discussed below.
Judgements
Impairment testing is carried out for all investments at the year-end date where there is an indication that impairment exists. For the purposes of impairment testing, the carrying amounts of the assets are reviewed and an impairment loss is recognised where the carrying amounts exceed the asset’s recoverable amount.
2. Income from parent undertaking and other income
Grant income is received from OMIL’s parent undertaking (Opportunity International) in order for OMIL to make convertible loans to, and invest in the shares of the OIN Implementing Members. Other income, £312,844 received in 2020, from OIUS, is the sale proceeds from the programme investments that OMIL held up to 2016 to 2020 and investments that OIUS held in which OMIL contributed grant funding.
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Opportunity Microfinance Investments Limited
Notes to the financial statements Year ended 31 December 2021
3. Charitable activities
| 3. Charitable activities |
||
|---|---|---|
| Year ended | Year ended | |
| 31 December | 31 December | |
| 2021 | 2020 | |
| £ | £ | |
| Audit fee and registry cost of OBUL shares | (4,760) | (890) |
4. Trustees’ remuneration
No trustee or any connected person received any remuneration or reimbursement of expenses from the charity during the year (2020: £nil).
5. Net movement in funds
Net movement in funds are stated after charging:
| Auditor’s remuneration-auditing service Registry cost of OBUL shareholding 6. Programme Investments Investments – equity shares £ As at 1 January 2021 748,245 Additions 70,000 Exchange difference - As at 31 December 2021 818,245 |
Year ended 31 December 2021 £ (4,760) - (4,760) Investments – convertible loans £ 1,449,342 385,919 (38,156) 1,797,105 |
Year ended 31 December 2020 £ (879) (11) (890) Total £ 2,197,587 455,919 (38,156) 2,615,350 |
|---|---|---|
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Opportunity Microfinance Investments Limited
Notes to the financial statement Year ended 31 December 2021
6. Programme Investments (continued)
Convertible loan made to OISL was converted to equity in 2020, however as the trustees do not control or influence the running of OISL, it is recognised as a programme investment.
The trustees have reviewed for impairment during the year to ensure that the valuation of investments at 31 December 2021 is in line with the expected proceeds from the eventual sale of investments.
During 2021 OMIL has been gifted shares of 4% by Opportunity International United States (Support Member) in the Opportunity Bank Uganda Limited (OBUL). OMIL also made a further equity transfer of £70,000, which took the total shareholding to 5%.
| Opportunity International Savings and Loans Limited (OISL) (Ghana) Opportunity Bank Uganda Limited (OBUL) |
Share holding Class of shares held Net assets Surplus/ (deficit) for theyear |
|---|---|
| 27% Ordinary shares of no par value £7,814,590 £2,099,548 5% Ordinary shares of Shs 200 par value £6,574,342 (£1,338,917) |
Programme investments represent those investments purchased as part of the fulfilment of the charitable objectives, not with the aim of generating income. They are usually purchased using restricted donations, which require that an investment is made. The activity provided by OISL is microfinance services.
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Opportunity Microfinance Investments Limited
Notes to the financial statement Year ended 31 December 2021
| 7. Debtors As at 31 December 2021 Amounts falling due within one year: £ Amounts due from parent undertaking 542,516 Amounts due are interest free, unsecured and repayable on demand. 8. Liabilities Amounts falling due within one year: As at 31 December 2021 £ Accruals and other creditors 4,800 9. Analysis of net assets between funds Year ended 31 December 2021 Unrestricted Restricted £ £ Fixed Asset Investments - 2,615,350 Net Current Assets 537,716 - 537,716 2,615,350 Year ended 31 December 2020 Unrestricted Restricted £ £ Fixed Asset Investments - 2,197,587 Net Current Assets 542,476 - 542,476 2,197,587 |
As at 31 December 2020 £ 543,476 As at 31 December 2020 £ 1,000 Total £ 2,615,350 537,716 3,153,066 Total £ 2,197,587 542,476 2,740,063 |
|
|---|---|---|
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Opportunity Microfinance Investments Limited
Notes to the financial statements Year ended 31 December 2021
10. Staff costs
The parent charitable company covers all staff costs for the group. OMIL had no employees during 2021 (2020: nil)
11. Parent company and ultimate control
OMIL is a wholly owned subsidiary of Opportunity International United Kingdom (OIUK); a charity registered in England and Wales, number 1107713 and in Scotland (SC039692) and a company limited by guarantee, registered in England and Wales, number 05322719. The principal activity of OIUK is raising funds from various sources and delivering our work through creating partnerships on the ground, with socially driven microfinance organisations, NGOs and other relevant organisations.
Opportunity International United Kingdom is considered by the trustees to be the ultimate parent entity, and is the parent entity of the largest and smallest group of undertakings of which OMIL is a part and for which group accounts are drawn up. These accounts can be obtained from Angel Court, 81 St Clements, Oxford, OX4 1AW.
12. Related party transactions
The charity has availed itself of the exemption provided in section 33 FRS102, for wholly owned subsidiaries, from the requirement to give details of transactions with entities which are part of the group.
13. Post balance sheet events
The convertible loans to VFDRC and SASL (totalling £930,768) have been converted to grant, in February 2022, this is when the FCDO allowed the transfer of asset hence it has not been booked in 2021.
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Opportunity Microfinance Investments Limited
Notes to the financial statement Year ended 31 December 2021
14. Analysis of restricted funds
Restricted funds represent funds received from Opportunity International, to invest in programme related investments.
| OISL SASL VFDRC OBUL OISL SASL VFDRC |
As at 1 January 2021 £ 1,288,391 677,804 231,392 2,197,587 As at 1 January 2020 £ 1,160,104 572,848 240,739 1,973,691 |
Income £ 185,004 137,657 63,258 70,000 455,919 Income £ 167,299 150,000 - 317,299 |
Currency loss on convertible loans £ (20,936) (19,618) 2,398 (38,156) Currency loss on convertible loans £ (39,012) (45,044) (9,347) (93,403) |
As at 31 December 2021 £ 1,452,459 795,843 297,048 70,000 2,615,350 As at 31 December 2020 £ 1,288,391 677,804 231,392 2,197,587 |
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|---|---|---|---|---|---|---|
Abbreviations used:
Opportunity International Savings and Loans Limited (OISL) Sinapi Aba Savings and Loans Limited (SASL) VisionFund DRC, S.A. (VFDRC)
Opportunity Bank Uganda Limited (OBUL)
OISL- the above is a combination of equity shares and convertible loans made over the years to OISL. The latest additions are from the FCDO UKAM project loan portfolio funding.
SASL- This includes £178k of convertible loan carried forward from 2014. Subsequent funds are from the FCDO UKAM project loan portfolio funding.
VFDRC- this is entirely the loan portfolio convertible loan from the current FCDO UKAM project.
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