ADLA Circular on Statements of Assets and Liabilities

4 October 2022 EXCHANGE CONTROL CIRCULAR 03/2021 Authorized Dealers with Limited Authority are advised that, as a step towards the Bank of Namibia (hereinafter “the Bank”) digital transformation journey, the submission of the Statement of Assets and Liabilities, which is required in terms of Section 8.4 (iii) of the Policy Guidelines on Appointment of Authorized Dealers in Foreign Exchange with Limited Authority, has been automated. Therefore, the Bank hereby issues a directive on the form and manner on which the Statement of Assets and Liabilities should be submitted to the Bank. Form of submission Authorised Dealers with Limited Authorities are advised that the Statement of Assets and Liabilities shall be submitted via an electronic format as per the guidance below:

1. Accessing the system The user can login with the credentials and system link, which shall be provided by the Bank. Forgot Password can be used to reset password and a password reset email will be sent to the email address used.

2. Locating the return The Statement of Assets and Liabilities can be located as per the following steps: after logging into the system and navigating to the Filings tab, users will be able to see the ADLA return scheduled for their organization. To start completing the return, the user would click on the Filing ID associated with the period they are entering data for. To launch the Statement of Assets and Liabilities, the user would click on the Filing ID associated with the period they are entering data for, the return will launch for completion.

3. Completing the return Below is an example of how the Purchases and Sales Return will look like once it is launched for completion. Users should proceed to fill out all relevant input fields in this return:

4. Validating the return After all values are entered, the user will select validate at the top right corner of the screen.

5. Saving or submitting the return After validating, the user will be taken to the validation screen. If there are no fatal errors in the filing, they will have the options to Save or Submit the filing. Clicking Save will allow the user to come back at another time to submit the filing to the Bank, while selecting Submit will send the filing to the Bank for review.

The description of each line item in the Statement of Assets and Liabilities are as follow:

1. NON-CURRENT ASSETS: 1.1. Property, Plant & Equipment – report the company's physical or tangible long￾term assets that typically have a life of more than one year. Examples of Property, Plant & Equipment include buildings, machinery, land, office equipment, furniture, and vehicles. 1.2. Intangible assets – report non-monetary assets which are without physical substance and identifiable (either being separable or arising from contractual or other legal rights). 1.3. Right use of assets – This fall within the intangible assets described above but may be singled out and be reported as a separate line item. 1.4. Other financial Assets - report financial instruments arising from contractual provisions in accordance with IAS 39. 1.5. Deferred tax - report unused tax losses and unused tax credits to the extent that it is probable that future taxable profit will be available against which the unused tax losses and unused tax credits can be utilised (IAS 12). 1.6. Investments - report investments a company has made to help it sustain a successful and profitable future in accordance with IAS 28. These could include stocks or bonds from other companies, Treasury bonds, etc. 1.7. Other – report any other non-current assets not itemised above.
2. CURRENT ASSETS: 2.1. Inventory – report the cost of inventories i.e., all costs of purchase, costs of conversion (direct labour and production overhead) and other costs incurred in bringing the inventories to their present location and condition (IAS 2).

2.2. Current Tax Receivable – report the amount of funds a company expects from the Receiver of Revenue i.e., the funds the government owes the company for remitting more money as tax than tax due. 2.3. Trade and Other Receivables - report funds paid to suppliers for which goods or services have no yet been received from suppliers in the ordinary course of business. 2.4. Cash and Cash Equivalents – report cash on hand and demand deposits, together with short-term, highly liquid investments that are readily convertible to a known amount of cash, and that are subject to an insignificant risk of changes in value (IAS 7). 2.5. Other Deposits - report fixed-term deposits (i.e., deposits with a fixed maturity, often referred to simply as ‘term deposits’); open-ended or perpetual deposits requiring a period of notice for withdrawal without penalty; and longer-term deposits with early withdrawal provisions subject to some form of penalty, such as loss of interest. 1.1. Loan to Group Companies - report formal contractual lending agreements within the same group (IFRS 9). 1.2. Loans to Shareholders – report formal contractual lending agreements with the shareholders of the company. 1.3. Short Term Investments – report short-term (highly liquid) investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. These are normally held for purpose of meeting short-term cash commitments (IAS 7). Other – report any other current assets not itemised above. 2. EQUITY: 2.1. Share Capital – report share capital at par value. Shares are classified as equity when there is no contractual obligation to transfer cash or other financial assets (IAS32).

2.2. Retained Income – report the net earnings not paid out as dividends but retained by the company to be reinvested in its core business or to pay debt (IAS 8). 2.3. Accumulated Loss – report accumulated deficits (loss) at the beginning of the period and at the reporting date (IAS 1). 3. NON-CURRENT LIABILITIES 3.1. Loans from Shareholders – report formal contractual lending agreements with the shareholders of the company. 3.2. Loans from Group Companies – report formal contractual lending agreements within the same group (IFRS 9). 3.3. Loans from other Sources – report loans from non-related parties which has a right to defer settlement for at least twelve months after the reporting period (amended IAS 1). 3.4. Deferred Tax Liability – report the amount of income tax payable in future periods in respect of taxable temporary differences i.e., tax that is payable in the future (IAS 12). 3.5. Other Financial Liabilities – report contractual obligation to deliver cash or another financial asset to another entity; or to exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavourable to the entity; or a contract that will or may be settled in the entity's own equity instruments (IAS 32). 3.6. Long term Provisions – report provisions for liabilities of uncertain timing or amount, and contingent liabilities - possible obligations and present obligations that are not probable or not reliably measurable (IAS 37). 3.7. Long term Right use of asset Liability – report finance leases (over one year) which transfer substantially all the risks and rewards of ownership and give rise to asset and liability recognition by the lessee and a receivable by the lessor (IAS 17). 3.8. Other – report any other non-current liabilities not itemised above

4. CURRENT LIABILITIES 4.1. Loans from Shareholders – report contractual obligation (within one year) of the issuer either to deliver cash or another financial asset to the holder or to exchange financial assets or financial liabilities with the holder under conditions that are potentially unfavourable to the issuer (IAS 32.17). 4.2. Loans from other Sources – report contractual obligations (within one year) of the financial instrument (loan). 4.3. Trade and Other Payables – report obligations to pay for goods or services that have been acquired from suppliers in the ordinary course of business. 4.4. Current Tax Payable – report taxes due to the government within one year. 4.5. Cash and Cash Equivalents – report cash on hand and demand deposits, together with short-term, highly liquid loans that are readily convertible to a known amount of cash, and that are subject to an insignificant risk of changes in value (IAS 7). 4.6. Short Term Provisions – report provisions for liabilities of uncertain timing or amount, and contingent liabilities - possible obligations and present obligations that are not probable or not reliably measurable. 4.7. Short term Right use of asset Liability – report finance leases (within one year) which transfer substantially all the risks and rewards of ownership, and give rise to asset and liability recognition by the lessee and a receivable by the lessor (IAS 17) 4.8. Other – report any other current liabilities not itemised above Manner of submission The Statement of Assets and Liabilities shall only be submitted to the Bank through this automated process. Therefore, no hard copies or emailed returns shall be accepted by the Bank after go-live this automated system. Finally, we wish to reiterate the following:

Reporting dates: The Statement of Assets and Liabilities is submitted at quarterly intervals; therefore, the reporting date shall be the 31st of March and December and the 30th of June and September. Certification for submission of statutory returns: The Principal Officer of ADLA or his delegated Officer shall be presumed to have attested for the correctness of the data in the return once it’s submitted to the Bank. Submission Date: The Statement of Assets and Liabilities shall be submitted to the Bank on or before the 15th day of the following month. For example, the Statement of Assets and Liabilities for March 31st shall be submitted no later than April 15th and the Statement of Assets and Liabilities for June 30th shall be submitted by no later than July the 15th, etc. Revised Returns and Reports: The Bank may require the submission of revised returns or reports if the returns or reports as previously submitted contain errors in how the reporting ADLA classified or categorized items in the returns or reports, i.e., on what line of the return an item has been reported. When dealing with the recognition and measurement of events and transactions in the returns, revised returns may be required if the Bank determines that the returns as previously submitted contain errors that are material for the ADLA. Applicability of International Financial Reporting Standards to Regulatory Reporting Requirements: For recognition and measurement purposes, the regulatory reporting requirements applicable to returns shall conform to International Financial Reporting Standards (IFRS) unless expressly stated otherwise in these instructions. Ms. Penelao Kapenda Deputy Director: Exchange Control