THE INSTITUTE OF RISK MANAGEMENT SOUTH AFRICA(Registration number 036-539-NPO)
FINANCIAL STATEMENTSFOR THE YEAR ENDED 28 FEBRUARY 2015
The Institute of Risk Management South Africa(Registration number 036-539-NPO)Financial Statements for the year ended 28 February 2015
General Information
Executive Committee S Morland
C Palm
M Robins
P Tillman
N Pandor
C Brits
B Gutshwa
L Carlo
M Kuipers
A Mothibi
Business address 1st Floor, Block A
Grayston Ridge Office Park
144 Katherine Street
Sandton
2196
Postal address Postnet Suite 616
Private Bag X 43
Sunninghill
2157
Bankers First National Bank
Auditor's A Fell
Chartered Accountant (S.A.)
Registered Auditor
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The Institute of Risk Management South Africa(Registration number 036-539-NPO)Financial Statements for the year ended 28 February 2015
Index
The reports and statements set out below comprise the financial statements presented to the members:
Index Page
Independent Auditor's Report 3
Report of the Executive Committee 4
Statement of Financial Position 5
Statement of Comprehensive Income 6
Statement of Changes in Equity 7
Statement of Cash Flows 8
Accounting Policies 9 - 10
Notes to the Financial Statements 11 - 12
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A. FELLGeoktrooieerde Rekenmeesters (SA) & Geregistreerde OuditeureChartered Accountants (SA) & Registered Auditors Praktyk/Practice no. 947814
Kantore te / Oficce at: Bus / Box 15177, Lynn East, 0039Plot 80, Zeekoegat, Pretoria, 0002 E-mail/E-Pos: [email protected] 16, 18de / 18th Str., Hazelwood, 0081 Tel. 012 808 2151 (Zeekoegat)
Cell. 074 116 5000 (Zeekoegat)Tel. 012 346 8304 (Hazelwood)Fax. 086 672 6780
Independent Auditor's Report
To the members of The Institute of Risk Management South Africa
I have audited the financial statements of The Institute of Risk Management South Africa, as set out on pages 5 to 12, which comprise the statement of financialposition as at 28 February 2015, and the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flowsfor the year then ended, and the notes, comprising a summary of significant accounting policies and other explanatory information.
Executive Committee's Responsibility for the Financial Statements
The Institute's executive committee is responsible for the preparation and fair presentation of these financial statements. 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.
Auditor's Responsibility
My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with International Standards onAuditing. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financialstatements 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 dependon the auditor's judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In makingthose risk assessments, the auditor considers internal control relevant to the Institute’s preparation and fair presentation of the financial statements in order todesign audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Institute’s internalcontrol. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made bymanagement, as well as evaluating the overall presentation of the financial statements.
I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.
Opinion
In my opinion, the financial statements present fairly, in all material respects, the financial position of The Institute of Risk Management South Africa as at28 February 2015, and its financial performance and cash flows for the year then ended in accordance with the International Financial Reporting Standard forSmall and Medium-sized Entities, and the requirements of the Companies Act 71 of 2008.
A FellChartered Accountant (S.A.)Registered Auditor
5 June 2015Pretoria
Vennoot / Partner: ANNELIEN FELL
Cell. 082 453 0262
The Institute of Risk Management South Africa(Registration number 036-539-NPO)Financial Statements for the year ended 28 February 2015
Report of the Executive Committee
1. Historical Background
The Institute of Risk Management South Africa was formed as an Association of Persons following the amalgamation oftwo predecessor associations in September 2003.
The Institute is registered as a Non-Profit Organisation. Operating from permanent offices in Sandton, Johannesburg, witha full time staff, it is the authorative professional body representing individuals and companies committed to theenhancement of Enterprise Risk Management (ERM).
The Institute offers a range of services including the professional accreditation of members, interaction and discussion oncurrent risk issues, research and project development, skills development and opportunities for networking andprofessional development.
2. Committee members and secretary
The committee members of the Institute during the year and to the date of this report are as follows:
Committee members Designation ChangesS Morland PresidentC Palm Vice President Appointed 19 June 2014M Robins Vice PresidentP Tillman Honorary TreasurerN Pandor Honorary Secretary Appointed 19 June 2014C Brits Exco MemberB Gutshwa Exco MemberL Carlo Exco MemberM Kuipers Exco Member Appointed 19 June 2014A Mothibi Exco Member Appointed 19 June 2014
3. Date of authorisation for issue of financial statements
The financial statements have been authorised for issue by the Executive committe on 21 May 2015. No authority wasgiven to anyone to amend the financial statements after the date of issue.
S Morland P Tillman
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The Institute of Risk Management South Africa(Registration number 036-539-NPO)Financial Statements for the year ended 28 February 2015
Statement of Financial Position as at 28 February 2015Figures in Rand Note(s) 2015 2014
Assets
Non-Current Assets
Property, plant and equipment 2 184 836 128 926
Intangible assets 3 600 417 -
785 253 128 926
Current Assets
Trade and other receivables 4 881 875 637 127
Cash and cash equivalents 5 4 268 480 4 290 037
5 150 355 4 927 164
Total Assets 5 935 608 5 056 090
Equity and Liabilities
Equity
Retained surplus 4 991 121 3 901 100
Liabilities
Current Liabilities
Trade and other payables 6 685 442 550 249
Income received in advance 259 045 604 741
944 487 1 154 990
Total Equity and Liabilities 5 935 608 5 056 090
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The Institute of Risk Management South Africa(Registration number 036-539-NPO)Financial Statements for the year ended 28 February 2015
2015 2014
Revenue
Annual Subscriptions 2 353 451 1 906 912
Breakfast income (123 692) (29 701)
Conference income 1 376 241 932 157
Dinner income 19 240 46 405
Other event income 51 442 145 037
Royalties 12 100 10 203
Sale of books and booklets 250 705
Training income 1 441 171 838 751
Website related income 38 290 34 570
5 168 493 3 885 039
Other income
Interest received 7 228 472 154 406
Profit on exchange differences 21 028 6 875
SARS Employment Tax Incentive received 2 190 -
251 690 161 281
Operating expenses
Accounting fees 42 600 33 173
Advertising and media 275 996 212 586
Auditors remuneration 10 30 950 26 100
Bad debts - 110 700
Bank charges 27 655 20 423
Computer expenses 101 349 74 506
Debtor collection fees 3 550 -
Depreciation, amortisation and impairments 51 183 40 941
Employee costs 2 708 937 2 000 730
Education and technical development 89 331 -
General expenses 51 526 37 605
Insurance 9 768 8 042
Internet costs 123 886 117 458
Lease rentals on operating lease 571 453 294 909
Members' meeting costs 36 085 5 745
Printing and stationery 11 677 6 756
Repairs and maintenance 30 053 45 575
Security 7 566 7 306
Telephone and fax 54 541 36 895
Travel - local and overseas 98 396 32 264
4 326 502 3 111 714
Operating profit 1 093 681 934 606
Finance costs 8 (3 660) (145)
Profit for the year 1 090 021 934 461
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The Institute of Risk Management South Africa(Registration number 036-539-NPO)Financial Statements for the year ended 28 February 2015
Statement of Changes in Equity
Figures in RandRetainedsurplus
Total equity
Balance at 1 March 2013 2 966 638 2 966 638
Profit for the year 934 462 934 462
Balance at 1 March 2014 3 901 100 3 901 100
Profit for the year 1 090 021 1 090 021
Balance at 28 February 2015 4 991 121 4 991 121
Note(s)
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The Institute of Risk Management South Africa(Registration number 036-539-NPO)Financial Statements for the year ended 28 February 2015
Statement of Cash FlowsFigures in Rand Note(s) 2015 2014
Cash flows from operating activities
Cash generated from operations 11 461 141 657 592
Interest income 228 472 154 406
Finance costs (3 660) (145)
Net cash from operating activities 685 953 811 853
Cash flows from investing activities
Purchase of property, plant and equipment 2 (107 093) (121 666)
Purchase of other intangible assets 3 (600 417) -
Net cash from investing activities (707 510) (121 666)
Total cash movement for the year (21 557) 690 187
Cash at the beginning of the year 4 290 037 3 599 850
Total cash at end of the year 5 4 268 480 4 290 037
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The Institute of Risk Management South Africa(Registration number 036-539-NPO)Financial Statements for the year ended 28 February 2015
Accounting Policies
1. Presentation of financial statements
The financial statements have been prepared on the historical cost basis, and incorporate the principal accountingpolicies set out below. They are presented in South African Rands.
These accounting policies are consistent with the previous period.
1.1 Property, plant and equipment
Property, plant and equipment are tangible items that: are held for use in the production or supply of goods or services, for rental to others or for administrative purposes;
and are expected to be used during more than one period.
Property, plant and equipment is carried at cost less accumulated depreciation and accumulated impairment losses.
Cost includes all costs incurred to bring the asset to the location and condition necessary for it to be capable of operatingin the manner intended by management.
Costs include costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurredsubsequently to add to, replace part of, or service it. If a replacement cost is recognised in the carrying amount of an itemof property, plant and equipment, the carrying amount of the replaced part is derecognised.
Depreciation is provided using the straight-line method to write down the cost, less estimated residual value over theuseful life of the property, plant and equipment, which is as follows:
The useful lives of items of property, plant and equipment have been assessed as follows:
Item Depreciation method Average useful life
Furniture and fixtures Straight line 6 - 10 yearsIT Equipment Straight line 3 years
The residual value, depreciation method and useful life of each asset are reviewed at each higher (lower) if there areindicators present that there has been a significant change from the previous estimate.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognisedin profit or loss in the period.
1.2 Intangible assets
Intangible assets are initially recognised at cost and subsequently at cost less accumulated amortisation andaccumulated impairment losses.
Research and development costs are recognised as an expense in the period incurred.
Amortisation is provided to write down the intangible assets, on a straight-line basis, as follows:
Item Useful lifeCapitalised development cost - Code of good practise 5 yearsCapitalised development cost - Board examinations 5 years
If the institute is unable to make a reliable estimate of the useful life of an intangible asset, the life is presumed to be 10years.
The residual value, amortisation period and amortisation method for intangible assets are reassessed when there is anindication that there is a change from the previous estimate.
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The Institute of Risk Management South Africa(Registration number 036-539-NPO)Financial Statements for the year ended 28 February 2015
Accounting Policies
1.3 Revenue
Revenue is recognised to the extent that the institute has transferred the significant risks and rewards of ownership ofgoods to the buyer, or has rendered services under an agreement provided the amount of revenue can be measuredreliably and it is probable that economic benefits associated with the transaction will flow to the institute. Revenue ismeasured at the fair value of the consideration received or receivable, excluding sales taxes and discounts.
Interest is recognised, in profit or loss, using the effective interest rate method.
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The Institute of Risk Management South Africa(Registration number 036-539-NPO)Financial Statements for the year ended 28 February 2015
Notes to the Financial StatementsFigures in Rand 2015 2014
2. Property, plant and equipment
2015 2014
Cost Accumulateddepreciation
Carrying value Cost Accumulateddepreciation
Carrying value
Furniture and fixtures 173 451 (40 736) 132 715 95 173 (14 753) 80 420IT equipment and computersoftware
219 162 (167 041) 52 121 190 347 (141 841) 48 506
Total 392 613 (207 777) 184 836 285 520 (156 594) 128 926
Reconciliation of property, plant and equipment - 2015
Openingbalance
Additions Depreciation Total
Furniture and fixtures 80 420 78 278 (25 983) 132 715IT equipment and computer software 48 506 28 815 (25 200) 52 121
128 926 107 093 (51 183) 184 836
Reconciliation of property, plant and equipment - 2014
Openingbalance
Additions Depreciation Total
Furniture and fixtures 4 025 80 519 (4 124) 80 420Computer software 44 176 41 147 (36 817) 48 506
48 201 121 666 (40 941) 128 926
3. Intangible assets
2015 2014
Cost Accumulatedamortisation
Carrying value Cost Accumulatedamortisation
Carrying value
Capitalised developmentcost - Code of practice
255 904 - 255 904 - - -
Capitalised developmentcost - Board examinations
344 513 - 344 513 - - -
Total 600 417 - 600 417 - - -
4. Trade and other receivables
Trade receivables 737 655 415 266Prepayments - 45 716Deposits 144 220 176 145
881 875 637 127
5. Cash and cash equivalents
Cash and cash equivalents consist of:
Bank balances 423 267 518 974Short-term deposits 3 845 213 3 771 062
4 268 480 4 290 036
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The Institute of Risk Management South Africa(Registration number 036-539-NPO)Financial Statements for the year ended 28 February 2015
Notes to the Financial StatementsFigures in Rand 2015 2014
6. Trade and other payables
VAT 160 498 97 489Other payables 50 958 37 938Accrued expenses 473 986 414 822
685 442 550 249
7. Investment revenue
Interest revenueBank 228 472 154 406
8. Finance costs
Bank 109 145Late payment of tax 3 551 -
3 660 145
9. Taxation
No provision has been made for 2015 tax as the Institute is exempt from taxation in terms of Section 10(1) of the IncomeTax Act 1962, as ammended.
10. Auditor's remuneration
Fees 30 000 24 500Tax and secretarial services 950 1 600
30 950 26 100
11. Cash generated from operations
Profit before taxation 1 090 021 934 462Adjustments for:Depreciation and amortisation 51 183 40 941Interest received - investment (228 472) (154 406)Finance costs 3 660 145Changes in working capital:Trade and other receivables (244 749) (74 786)Trade and other payables 135 193 87 608Income received in advance (345 695) (176 372)
461 141 657 592
12. Commitments
Operating leases – as lessee (expense)
Minimum lease payments due - within one year 389 946 418 223 - in second to fifth year inclusive 563 122 1 927 388
953 068 2 345 611
Operating lease payments represent rentals payable by the institute for certain of its office properties and are negotiatedfor an average term of three years. No contingent rent is payable.
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General InformationBusiness addressPostal addressBankersAuditor's
IndexIndependent Auditor's ReportReport of the Executive CommitteeStatement of Financial PositionStatement of Comprehensive IncomeOperating expensesStatement of Changes in EquityStatement of Cash FlowsAccounting Policies-ACPPresentation of financial statements-ACPProperty, plant and equipment-ACPIntangible assets-ACPRevenue-ACP
Notes to the Financial StatementsProperty, plant and equipmentIntangible assetsTrade and other receivablesCash and cash equivalentsTrade and other payablesInvestment revenueFinance costsTaxationAuditor's remunerationCash generated from operationsCommitments
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