Sudan sanctions eased - the real thing this time

#Sudan sanctions This is the real thing this time https://t.co/azBJ339oyj The phone is ringing off the hook. Welcome back to Khartoum guys

— Audit opinion (@KhartoumFCA) January 19, 2017

Seasons greetings for 2017

Happy new year all. Back to work. Thankyou Facebook. See you Microsoft, Apple and Google in Khartoum soon! pic.twitter.com/MjIvv8IH4o

— Audit opinion (@KhartoumFCA) January 19, 2017

May 11 Envirocem Conference London Speakers slides

Sudan ConcreteActiononClimateChange

Corporate Social Responsibility reporting and Sudan in 2000.

http://www.talisman-energy.com/upload/report_link/6/02/csr2000_report.pdf

Deloitte for South Sudan

Sudan Cement

@GlobalCement Berber Cement and Al Salam are still in the game. Market shares respectively 14% and 9%. Sudan's inflation rate is down to 15%

— Audit opinion (@KhartoumFCA) January 28, 2016

Lightening US sanctions and Utility scale solar in Sudan

When I visited Sudan in 2014 I produced a note for the firms banking industry clients forecasting a lightening of US sanctions and increased place for renewable energy from solar sources. At the time there was some understandable scepticism. Now there is both a lightening of US sanctions and utility scale solar is coming to Sudan.

"Bit rainy in the Bahamas if you are thinking of a cruise - an introduction to Solar Re" by on @LinkedIn https://t.co/DJRNoQG1Vw

— Audit opinion (@KhartoumFCA) January 16, 2016

Solar in the Chad, North Darfur, Khartoum, Atbara, Port Sudan corridor

Sudan and the IMF, The National Dialogue envisioning the next generation's Sudan

http://www.imf.org/external/country/SDN/rr/pdf/SMP.pdf

South Sudan devalues to parallel market rate of 18.5 to the USD

The central bank adopted the parallel market rate of 18.5 per dollar from a previous fixed rate of 2.96, Governor Kornelio Koriom Mayik told reporters in Juba, the capital.

South Sudan devalues currency by 84%, abandoning dollar peg https://t.co/c2L25Zhbbp pic.twitter.com/aydYTkWv70

— Bloomberg Business (@business) December 15, 2015

Debt relief for Sudan?

My crazy life. Required reading. https://t.co/NsOi29lALR

— Audit opinion (@KhartoumFCA) December 16, 2015

Concrete Action on Climate Change - Sudan shows the way

عمل ملموس بشأن تغير المناخ - معارض السودان الطريق

بطريقة كلمة البلدان النامية هي تسمية خاطئة. تلك البلدان التي يشار إليها كما وضعت والتي هي في واقع البلدان النامية. هم في حالة مستمرة من التنمية، وأدى هذا التطور من خلال سياسة الحكومة والقطاع الخاص في شراكة خلاقة-

يمكن للحكومات وينبغي أن تيسر العام  مبادرات القطاع الخاص بطريقتين - عن طريق القيام الأشياء التي يمكن للحكومات القيام به، و- العمل من خلال الناس وخاصة الشباب. عن طريق القيام الأشياء التي يمكن للحكومات القيام به على الصعيد المالي - من خلال إعفاء واردات الألواح الشمسية وتوربينات الرياح من الرسوم أو تشجيع مصانع الألواح الشمسية على نطاق وكبيرة بما فيه الكفاية لتكون قادرة على المنافسة دوليا-

على الصعيد العالمي  عن طريق الاتفاق على الحد المطلق للانبعاثات من الوقود الأحفوري ذلك أنواع الطاقة المتجددة، لاستخدامها لسد الفجوة حتى خلق الطلب وهكذا خلق وفورات الحجم لجعل العرض الاقتصادي من مصادر الطاقة المتجددة-

على الصعيد المحلي  عن طريق اشتراط تركيب الألواح الشمسية إلى ديارهم في الواقع تشجيع كل مفهوم ما هو "سقف" ل الصناعية والخصائص المحلية للانتقال إلى أحد دمج الألواح الشمسية أو مستقبل جديد technolgies.Spatially الذكية - بجعل الأراضي المتاحة للإيجار على التي لموقع حدائق الشمسية يمكن اختيار مواقعها

ماليا من خلال ضمان التمويل GAP الدولي متاح لتغطية الفرق بين $ 6 سنتات للتكلفة كيلو وات ساعة من الوقود الأحفوري وسعر السوق من تكاليف الطاقة الشمسية لمشاريع واسعة النطاق مع تأثير كبير الكربون.

العمل من خلال الناس

من خلال اتخاذ نهج السوق فهم أن رأس مال القطاع الخاص هناك للمشاريع التي تعود أن رأس المال مع عائد معقول

.ومن خلال توجيه بنشاط المال العام الدولي حاليا بتعبئة بكميات كبيرة للمشاريع من خلال تمويل دراسات الجدوى ورأس المال المبدئي

خلال تشجيع مجتمع مدني من تجمعات الصناعة الذين يمكن الجمع بين لتقديم الجمهور - مبادرات خاصة

THINK BIG عن طريق تحديد استباقي تلك الصناعات مع الأكثر استفادة والأكثر أن تعطي. على سبيل المثال، شركات الأسمنت عرضة لانقطاع التيار الكهربائي ولكن لديها البنية التحتية الشبكة في مكان والقوى العاملة الذين يمكن نشر وصيانة الحدائق الشمسية على نطاق وفائدة-

من خلال اتخاذ المخاطر على الناس  عنصرا أساسيا للنجاح في الجمهور الفردية - الشراكات الخاصة هو واحد competant المؤهلين فرد المتحمسين الذين يمكن أن تنسيق وبناء الثقة بين مختلف الأطراف المعنية لتحقيق مشاريع معينة لتؤتي ثمارها. ويمكن للحكومة تكريم ومكافأة عمل هؤلاء الأفراد لتشجيع الآخرين على المضي قدما في الأدوار القيادية. ويمكن للحكومة أن توضح أن هناك NO مشاكل بلا حلول. أن الحكومات من خلال جهد متعدد الأطراف وسوف يمكن تعبئة لحل هذه المشكلة. وبهذه الطريقة سوف الشباب لم تصبح بخيبة أمل وتقع لمواعظ أولئك الذين يقولون ان المستقبل هو في أي حال واحد apocalytic أو ميؤوس منها. يقول المتشائمون لا يمكن فعل شيء بشأن تغير المناخ وحتى ينكر دليل على بأعينهم من وجودها وصلة لظاهرة الاحتباس الحراري. من خلال هذا الجمهور - جعل العمل الخاص بفضل تكلفة يتقدم بسرعة وتكنولوجيا الطاقة المتجددة التي سيتم مخطئا.

Concrete Action on Climate Change

Honoured to be featured as an entry on the Masdar 2016 blogging entry contest - join the fun make a difference here https://t.co/jGTwJxAzj3

— Audit opinion (@KhartoumFCA) December 10, 2015

Clinton Foundation in Africa

Working together
https://www.clintonfoundation.org/blog/2015/05/08/looking-how-africas-progress

Solar - who will invest

IFRS What's New in 2015?

The following requirements made since 1 July 2014: one revised Standard—IFRS 9 Financial Instruments; amendments to the following Standards: IFRS 10, IFRS 12, IAS 1, IAS 27 and IAS 28;

Annual Improvements to IFRSs 2012–2014 Cycle (which contains separate amendments to IFRS 5, IFRS 7, IAS 19 and IAS 34); and related consequential amendments.

IAS29 Sudan remains within the scope of IAS29. South Sudan is scoped into IAS29

IAS 29 Financial Reporting in Hyperinflationary Economies applies where an entity's functional currency is that of a hyperinflationary economy. The standard does not prescribe when hyperinflation arises but requires the financial statements (and corresponding figures for previous periods) of an entity with a functional currency that is hyperinflationary to be restated for the changes in the general pricing power of the functional currency.

IAS 29 was issued in July 1989 and is operative for periods beginning on or after 1 January 1990.

As accounting standards converge what are the changes?

Impact of change in accounting standards to FRS 102

During the course of 2015 and 2016 a major change is taking place concerning the accounting standards that govern the way a set of accounts is put together. This could change both the figures and the explanations in your accounts, including making retrospective changes to the prior year figures that are shown. There can also be taxation impacts in some situations.

The purpose of this letter is to set out a brief overview of the possible areas of change. It is written on the basis that you are currently using Financial Reporting Standards (FRS) and Statements of Standard Accounting Practice (SSAPs) or the Financial Reporting Standard for Smaller Entities (FRSSE) issued by the old Accounting Standards Board and you will be moving to FRS 102. Small companies are generally affected in the same way as larger companies, although there are a few differences which are highlighted below.

Without a full analysis of your accounts and a discussion with you regarding your choices of accounting policies and what are termed transitional exemptions, it is not possible (at this stage) to identify the precise areas of change. We would be happy however, to discuss completing this exercise with you and to carry out additional work that you may require with regard to accounting or tax as a result of these changes.

Summary of key changes

Financial statements

These might look a little different to your current accounts. There are some new choices for terminology, moving to more internationally used phrases such as property, plant and equipment instead of tangible fixed assets and inventories instead of stock. The primary statements required are now:

·         Statement of Financial Position (previously the Balance Sheet);

·         Statement of Comprehensive Income; or

o   Income statement (previously the Profit and Loss) and a separate

o   Statement of Comprehensive Income (previously the Statement of Total Recognised Gains and Losses)

·         A Statement of Changes in Equity (not required for a small entity)

·         A Statement of Cash Flows (not required for a small entity)

·         Notes

Cash flow statement

Small companies are not required to have a cash flow statement, but for others, the format of this has changed quite significantly. There are now just three main headings, operating, financing and investing activities.

For subsidiaries there is no automatic cash flow exemption, but there is a reduced disclosure regime which would permit the Statement of Cash Flows, together with other disclosures, to be omitted if certain conditions are met.

Financial instruments 

These include a wide range of assets and liabilities which are financial, rather than tangible or intangible in nature. For example, cash, debtors and creditors are all financial instruments. The main changes in respect of these items are that:

·         Investments in shares that are not group companies must be measured at fair value if possible, with any unrealised or realised gains or losses reflected in the profit or loss.

·         Derivatives, which includes items such as a forward currency contract, an interest rate swap, futures or options all need to be recognised in the balance sheet at their fair value with gains or losses in the profit or loss. In the past these were ignored until the contract was completed. The new treatment means that you will need to check if you have any such contracts and obtain a valuation for them, together with the valuation method used.

·         Loans that are not at a market rate need to be put into the accounts as if they are at market rate. This requires the calculation of notional interest at a market rate. (Public benefit entities, such as charities, do not need to do this though).

Foreign currency translation

The rules have changed so that where you have foreign currency transactions you will always need to translate the amounts at the rate ruling on the date of the transaction (the spot rate). In the past, you were able to use the rate of any related forward contract, or a contracted rate if one was agreed.

There is a requirement in FRS 102 to establish the functional currency of the entity. Normally this will be pounds sterling for a UK company, but if most of its cash flows are in another currency, or impacted by another currency then this may not be the case. We can discuss the impact of this if you think it might apply.

Hedge accounting

Because the impact of the changes described for foreign currency and financial instruments can be to increase the volatility in the profit and loss and not to match related transactions, there is the ability to use hedge accounting. This is a complex process but ensures close matching of related contracts, such as a foreign currency purchase and forward foreign exchange contract. If you think you may wish to use hedge accounting please discuss this with us.

Business combinations, associates and joint ventures

Acquisitions, or so called business combinations, are usually dealt with in the consolidated accounts if these are required (small groups are not required to prepare consolidated accounts). Under the new rules you are more likely to have to recognise intangible assets, such as customer lists, that you have purchased as part of the acquisition. Previously, these would often have just been part of the goodwill figure.

There are also some minor changes regarding associates, joint ventures and the accounting treatment of acquisitions or disposals achieved in stages.

Related party transactions

There have been some changes to the definitions and to the disclosure requirements, although these are fairly minor, unless you are a small company. Small companies will only need to disclose limited related party transactions and in particular only those which are not at a market rate.

Goodwill

If you cannot reliably estimate the life of goodwill, there are new rules that require the maximum life to be 10 years (or in some cases in 2015 only, 5 years). This may mean that some adjustments are needed to the amortisation period and/or value of goodwill in your accounts.

Investment property

If you hold investment property you will have to show it at fair value in the balance sheet, as now, but changes in value will go through the profit and loss for the year.

Property, plant and equipment

There are only minor changes to the rules here, although a transitional option exists which allows you to use a valuation of an asset as its deemed cost. This means you could, for example, value a property just once and then treat that value as if it were cost. This avoids having to continue valuing on a regular basis, which is required if you want to adopt the revaluation model. Instead, this transitional option allows a one-off uplift of the value of an asset.

Lease incentives

If you are a lessee or lessor of an asset under an operating lease then any lease incentives, such as rent free periods, will now need to be spread over the whole lease term. Currently they are just spread over the period to the first rent review. The lease term is now defined as the period over which there is reasonable certainty that the lease will continue, even if there is a break clause before that. This can have taxation implications, so you may wish to discuss this with us, as there are various options on transition.

Deferred tax

The rules for this have now been tightened up, meaning that deferred tax is required on some items that were previously exempt. This means that deferred tax will need to be recognised on all revaluations and also sometimes on unremitted earnings from a subsidiary. This will generally mean that your deferred tax figure will be higher than before.

Employee benefits

The new rules mean that it will be necessary to consider whether you need an accrual for holiday pay, where holiday is due at the year-end but has not been taken. If this amount is material it will need to be calculated each year and put into your accounts. It is usually only material if the holiday year and the accounting year are different, or if you allow staff to carry over significant amounts of holiday into the next year.

There have been some changes to the accounting for defined benefit pension schemes, but as these are rare please ask for further information if this affects you.

Share-based payments (FRSSE companies)

FRSSE companies have been exempt from the requirement to account for equity settled share-based payments. However, under FRS 102 they will now need to be accounted for. For other companies, the requirements for these are essentially the same as under the current rules.

Transitional changes

The general rule when dealing with the move to FRS 102 is that all the changes are applied retrospectively, through the calculation of what is termed a prior year adjustment. However, as this would sometimes be very onerous there are a number of transitional exemptions, enabling the new rules to be applied only in the future. These do not cover all the changes though, so in the first year there will probably be adjustments made to reserves and disclosures will be needed to explain the impact on the balance sheet and profit and loss. (Small companies are not required to give these disclosures although they are likely to be helpful to anyone using the accounts).

Practical impacts of the changes

There are some areas of your business that could be impacted adversely by the changes in the accounting rules if you do not consider the issues. Broadly speaking they include any contract, covenant or other agreement which is based on or refers to your accounts or specific figures in them. In particular, because the profit can be more volatile and include items such as gains on investment properties that are not yet realised, you should consider the following:

·         Is there likely to be an impact in meeting any bank covenant requirements?

·         Do I need to change any bonus or profit related pay agreements to exclude gains on items not yet realised?

·         Are there any earn-out agreements, on for example a business acquisition, which are based on profit in the accounts, but have not taken account of the changes due to FRS 102?

·         Do I need to make any tax elections in connection with financial instruments, so that tax is only charged when the final transaction takes place?

·         Do I need to consider the impact of tax on my tax flow forecasts?

We appreciate that these changes are wide-ranging and complex and we will, of course, be happy to advise and provide additional services to ensure that the transition to FRS 102 is dealt with as smoothly as possible. Please do call if you wish to discuss these matters further or to arrange for a quote to be provided for any additional services that you might require in connection with the transition to FRS 102.

Yours sincerely

Sudan - Economic snapshot

The general economic condition is that the Sudan is suffering from a deficit of visible to some extent offset by a surplus in invisibles. In particular oil sesame and livestock are traded for wheat and sugar.  The economic situation is well summarised in the IMF 2014 Sudan Country Report.

Sudan at one time reliant on 800,000 tonnes of grain supplied by the World Food Program now has private sector grain imports of 2.4m tonnes of wheat and 0.8m tonnes of sugar.

 The conurbation which has grown up around Khartoum and Omdurman (“the conurbation”) is home to some 10 million people who live somewhat different urbanised lives to the other 30 million some 20 million of whom pursue subsistence agriculture. In the west some 1250 homes can be served by 3.4MW of electricity. If a household of 8 is assumed that is 1.25m households with a potential energy demand of 3.4GW for the conurbation alone. The Meroe Dam finished in 2008-10 has a capacity of 1.25GW and there exists another 1.25GW of capacity. It can be seen domestic and industrial demands are in daily competition for the available energy. 

 The economic tone is generally positive with GDP growth. 

 Inflation after an episode of hyperinflation triggered by the adjustment to secession of South Sudan is reverting to single figures largely as a result of oil prices falling below $50 per barrel. 

US sanctions continue to throw up challenges but more to US trading partners than to Sudan. Sudans status as a food producer and exporter insulates it from the worst excesses of the US Sanctions Regime and provides goods for countertrade in particular with China in return for construction, manufactured goods and services like technology.

1.  IMF 2014 Sudan Country Report

2.  Foreign Trade Report Bank of Sudan

3.  Selected exports, Selected imports



4.  Official and Parallel exchange market

5.  Comparison of CPI to CPI in 2008

Cement in Sudan - Berber Cement - financial and human capital assure quality