financial statements for the year ended 31 december 2015 · financial statements for the year ended...

The Friends In Ireland Trust

(Registration number IT1148/2009) Financial statements

for the year ended 31 December 2015

Chartered Accountants (S.A.)

The Friends In Ireland Trust (Registration number IT1148/2009) Financial Statements for the year ended 31 December 2015

General Information

Country of incorporation and domicile

Type of trust

Trustees

Registered office

Business address

Postal address

Bankers

Auditor

Level of assurance

South Africa

Discretionary

M.C.M. Finucane

J. Clarke

V.A. Fenton

P.J. Shaper

M. Corbally

151 Main St

KOKSTAD

4700

107 Hope St

KOKSTAD

4700

P.O. Box65

KOKSTAD

4700

First National Bank

Nedbank

Paterson Dyke C.A. (S.A.)

Chartered Accountants (S.A.)

Registered Auditor

These financial statements have been audited in compliance with the applicable requirements of the Board of Trustees.


Index

The reports and statements set out below comprise the financial statements presented to the trustees:

Index

Trustees' Responsibilities and Approval

Independent Auditor's Report

Trustees' Certificate of Assurance

Statement of Financial Position

Statement of Comprehensive Income

Statement of Changes in Equity

Statement of Cash Flows

Accounting Policies

Notes to the Financial Statements

2

Page

3

4

5

6

7

8

9

10 -11

12 -15

The Friends In Ireland Trust (Registration number lT1148/2009) Financial Statements for the year ended 31 December 2015

Trustees' ResponsibUities•and Approval

The trustees are required to maintain adequate accounting records and are responsible .for the content and Integrity of the financial statements.and related financialjnformatlon included in this report. !Us their responsibility to ensure that the financial statementsfalrty presentthe state ofaffalrs of the trust as afthe end ofthe financial year and the resuUs of Its operations and cash flows.for the period then ended, in conformity with the lnlernationaLFinancial Reporting Standard for Small and Mediumsized Entitles. The external auditor is engaged to express an independent opinion on the financial statements.

The financial s�atements are prepared fn accordance with the International Financial Reporting Standard for Small and Medium-sized. Entities arid are basetj · upon appropriate accounting. policies consistently applied and supported by reasonable and prudentjudgments and estimates.

The trustees acknowledge that they are ultimately responsible for the system of internal financial control established by the lrust and place considerable Importance on maintaining a strong control environment. To enable the trustees to meet these responsibilities, the trustees set standards forintemarcontrolaimed at reducing the risk.of error or loss in a cost e�cUve manner. The standards indudethe proper delegation of responsibilities within.a clearly defined framework, effective accountin9 procedures and adequate segregation of duties to ensure an acceptableJevel of risk. These controls .are monitored throughout the trust and all employees are required to maintain the highest ethical standards in ensuring the trust's business is conducted in a manner thatln air reasonable circumstances is above reproach. TheJocus of risk management In. the trust is on identifying, assessing, managing and monltoring all known forms of risk across the trust• While.operating risk cannot be fully eliminated, the trust endeavours to minimise it by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed wlthln predetermined procedures and constraints.

The trustees are of the opinion, based.on the information and explanations given by managementitMtlhe system of Internal control· provldes•reasoriable assurance that the financial. records maybe .relied 1:m for the ·preparation of the ·financial statements. However, any.system of Internal financial control can provide only .reasonable, and not absolute, assurance against material misstatement or loss,

The trustees have.reviewed the.trust's cash flow forecastfor the year to 31 December 2016 and; in 1he light of this review and the current financial position, they are satisfied that the trusthas or has access.to adequate resources lo contlnue in operational existence for the foreseeable future.

The external auditor is responsible for Independently auditing and reporting on the trust's financial.statements. The financial statements have been examined by t.he trust's external auditor and their report is presented on page 4.

The fin ncial statements set out on pages 5 to 15; which have been prepared on the going concern basis. were approved by the tru

r es on. 20 May 20 6, an1 were signed on its behalf by:

� ·· .'L . : · Ha.£Lau,, 4 � Trustee

Paterson Dyke Chartered Accountants (S.A.) Registered Accountants and Auditors Practice No: 901776E Sole Practitioner: Brian S. Collins

Your reference

Independent Auditor's Report

To the trustees of The Friends In Ireland Trust

Our reference

Telephone: 039 727 2028

Fax: 039 727 3301 E-mail: [email protected]

109 Main St P.O. Box35

KOKSTAD, 4700

Date

We have audited the financial statements of The Friends In Ireland Trust. as set out on pages 6 to 15, which comprise the statement of financial position as at 31 December 2015, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and the notes, comprising a summary of significant accounting policies and other explanatory information.

Trustees' Responsibility for the Financial Statements

The trust's trustees are responsible for the preparation and fair presentation of these financial statements in accordance with the International Financial Reporting Standard for Small and Medium-sized Entities, and requirements of the Board of Trustees, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatements, whether due to fraud or error.

Auditor's 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 judgement, 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 management, 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

In our opinion, the financial statements present fairly, in all material respects, the financial position of The Friends In Ireland Trust as at 31 December 2015, and its financial performance and its cash flows for the year then ended in accordance with the International Financial Reporting Standard for Small and Medium-sized Entities, and the requirements of the Board of Trustees.

Paterson Dyke C.A. (S.A.) Registered Auditor

It� 20 May 2016

4

109 Main St KOKSTAD

4700


Trustees' Certificate of Assurance

This certificate of assurance is furnished in terms of the requirements of the Irish Department of Publice Expenditure and Reform in respect of Grants from the Exchequer Funds.

In this regard the trustees confirm that the public money granted was used on accordance with the terms and conditions of the grant.

1. The name of Grantor

Minister for Foreign affairs and Trade:

2. Name of the grant

Civil Society Fund Contract No: CSF014-1401

3. Purpose of the grant

Friends in Ireland OVC (Orphans and vulnerable children) Care in South Africa.

This includes the provision of drop-in centres and early childhood development for disadvantaged children.

4. Accounting for Grant

Amount and term of grant: - €120 OOO from 22 October 2014 to 22 October 2016

Reconciliation of amounts received, expended and deferred as per table below.

Grant received prior period Grant spent prior period Accrued as debtor in current period (Received after year end) Grant spent in current period Deferred to next period

5

€

60 OOO (15 466) 60 OOO

(51 753) (52 781)

R 847 104

(218 362) 973 554

(745 871) (856 425)


Statement of Financial Position as at 31 December 2015

Figures in Rand Note(s)

Assets

Non-Current Assets

Property, plant and equipment 2

Other financial assets 3

Deposit on property 4

Current Assets

Trade and other receivables 5 Cash and cash equivalents 6

Total Assets

Equity and Liabilities

Equity

Trust capital

Accumulated surplus

Liabilities

Current Liabilities

Trade and other payables

Deferred income - Grants 7

Total Equity and Liabilities

6

2015 2014

1 885 252 2 104 750

3 978 539 5 040 402

240 151 208 632

6103 942 7 353 784

1 010 285 108 783

1 112 519 1 963 891

2122 804 2 072 674

8 226 746 9 426 458

100 100

7 358 158 8 263 135

7 358 258 8 263 235

12 063 15 112

856 425 1 148 111

868 488 1163 223

8 226 746 9 426 458


Statement of Comprehensive Income Figures in Rand

Incoming resources from charitable sources

National Lottery Distribution Trust Fund - grant

Resources expended

Operating deficit

Investment revenue

Grant income brought forward/(deferred to future periods)

Surplusf{deficit) for the period

Other comprehensive income

Total comprehensive income for the period

Note(s)

8

11

10

7 and 9

7

2015 2014

1 452 447 3 158 573

300 OOO

(2 977 790) (5 535 787}

(1 525 343) (2 077 214)

328 680 429 715

291 686 {555 062)

(904 977) (2 202 561)

(904 977) (2 202 561)


Statement of Changes in Equity

Figures in Rand

Balance at 01 January 2014

Deficit for the year Other comprehensive income

Total comprehensive deficit for the year

Balance at 01 January 2015

Deficit for the year Other comprehensive income

Total comprehensive deficit for the year

Balance at 31 December 2015

Trust capital

100

100

100

8

Accumulated Total equity surplus

10 465 696 10 465 796

(2 202 561) (2 202 561)

(2 202 561) (2 202 561)

8 263 135 8 263 235

(904 977) (904 977)

(904 977) (904 977)

7 358158 7 358 258


Accounting Policies

1. Presentation of Financial Statements

The financial statements have been prepared in accordance with the International Financial Reporting Standard for Small and Medium-sized Entities. The financial statements have been prepared on the historical cost basis, and incorporate the principal accounting policies 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 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 supplied to donees for use in their community services is not capitalised by the trust and is expensed under charitable activities. However in the event of funders requiring that the items of property, plant and equipment funded by them be capitalised, such items are carried at cost less accumulated depreciation and accumulated impairment losses.

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 operating in the manner intended by management.

Costs include costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred subsequently to add to, replace part of, or service it. If a replacement cost is recognised in the carrying amount of an item of property, plant and equipment, the carrying amount of the replaced part is derecognised.

Depreciation is provided using the straight-line method, with the exception of buildings which is provided on the reducing balance method, to write down the cost, less estimated residual value over the useful life of the property, plant and equipment, which is as follows:

Item Buildings Furniture and fixtures Motor vehicles IT equipment

Average useful life 40 years 6 years 5 years 3 years

The residual value, depreciation method and useful life of each asset are reviewed at each annual reporting period if there are indicators 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 recognised in profit or loss in the period.

1.2 Investments

Investments at cost

Listed investments are measured at cost less impairments.

Other wealth income portfolios are measured at cost less impairments.

1.3 Impairment of assets

The trust assesses at each reporting date whether there is any indication that an asset may be impaired.

If there is any indication that an asset may be impaired, the recoverable amount is estimated for the individual asset. The listed share portfolio is treated as a single asset and is impaired if the market value of the portfolio at the reporting date is less than the carrying amount. However if there is an indication that an individual investment may be impaired, the recoverable amount is estimated for that individual investment.

10


Accounting Policies

1.3 Impairment of assets (continued)

If an impairment loss subsequently reverses, the carrying amount of the asset (or group of related assets) is increased to the revised estimate of its recoverable amount, but not in excess of the amount that would have been determined had no impairment loss been recognised for the asset (or group of assets) in prior years. A reversal of impairment is recognised immediately in profit or loss.

1.4 Provisions and contingencies

Provisions are recognised when: • the trust has an obligation at the reporting date as a result of a past event;• it is probable that the trust will be required to transfer economic benefits in settlement; and• the amount of the obligation can be estimated reliably.

Contingent assets and contingent liabilities are not recognised.

1.5 Donation and grant income

Donations and grants that do not impose specified future performance conditions are recognised in income when the grant proceeds are receivable.

Donations and grants that impose specified future performance conditions are recognised in income only when the performance conditions are met.

Donations and grants received before the revenue recognition criteria are satisfied are recognised as a liability.

Donations and grants of non monetary assets are measured at the fair value of the asset received or receivable. However donations and grants in the form of services or assistance that cannot be measured reliably are excluded.

1.6 Other revenue

Other revenue is recognised when all the following conditions are satisfied: • the amount of revenue can be measured reliably; and• it is probable that the economic benefits associated with the transaction will flow to the trust;

Interest is recognised, in surplus or deficit, using the effective interest rate method.

Dividends are recognised, in surplus or deficit, when the trust's right to receive payment has been established.

1. 7 Borrowing costs

Borrowing costs are recognised as an expense in the period in which they are incurred.

11



Figures in Rand

2. Property, plant and equipment

2015

Cost/ Accumulated Carrying value Valuation depreciation

and impairments

Land 400 OOO 400 OOO

Buildings 1 138 008 (156 358) 981 650 Furniture and fixtures 32 837 (26 675) 6 162 Motor vehicles 1 016 202 (518 764} 497 438 IT equipment 11 976 (11 974) 2

Total 2 599 02 3 (713 771) 1885 252

Reconciliation of property, plant and equipment· 2 015

Opening balance

Cost/ Valuation

400 OOO

1 138 008 32 837

1 053 472 11 976

2 6 36 293

Other changes,

movements Land 400 OOO

Buildings 1 006 821 Furniture and fixtures 8 670 Motor vehicles 689 257 IT equipment 2

2 104 750

Details of properties

Residential property, being erf 1017 situated in Kokstad, 1 654 sq m in extent

- Purchase price: 25 May 2009- Additions since purchase

3. Other financial assets

At cost less impairment Nedbank Private Wealth Income Portfolios Made up of cash held in call interest bearing deposits. Interest rate at year end: 6.4% per annum. Treated as a long term investment in accordance with the intentions of the trustees. Market value at year end: R1 805 508. South African Equity Investment Portfolio Made up of listed equities and instruments and managed by Nedbank Private Wealth. Treated as a long term investment in accordance with the intentions of the trustees. Market value at year end: R2 833 140.

Impairment

Non�current assets At cost less impairment

12

(37 270)

(3 7 2 7 0)

2015 2014

2014

Accumulated Carrying value depreciation

and impairments

(131 187) (24 167)

(364 215) (11 974)

(53 1 543 )

Depreciation

(25 171) (2 508)

(154 549)

( 18 2 2 28 )

1 040 OOO

498 007

1538 007

1 805 508

2 195 768

4 001 276 {22 737)

3 978 539

3 978 539

400 OOO

1 006 821 8 670

689 257 2

2 104 750

Total

400 OOO

981 650 6 162

497 438 2

1 885 252

1 040 OOO

498 007

1538 007

2 575 939

2 490 236

5 066 175 (25 773)

5 040 402

5 040 402



Figures in Rand

4. Deposit on property

2015 2014

Payment of purchase price (plus accrued interest) lodged with attorney's, together with accrued subdivision costs, in respect of Lot 122 Franklin which is in the process of sub-division prior to registration.

5. Trade and other receivables

Trade receivables 4 911 VAT 36 731 103 872 Accrued income 973 554

1 010 285 108 783

6. Cash and cash equivalents

Cash and cash equivalents consist of:

Bank balances 1 110 818 1 959 981 Cash on hand 1 701 3 910

1 112 519 1 963891

7. Deferred income - Grants

Irish Aid Civil Society Fund: CSF014-1401 856425 847104

National Lottery Distribution Trust Fund 301 007

Current liabilities 856 425 1 148 111

Grants received/accrued but not expended at the reporting date. Performance criteria to be fulfilled in subsequent periods.

13



Figures in Rand

8. Incoming resources from charitable activities

Grant from Irish Aid Civil Society Fund (See note (a) below) Grant from National Development Agency (See note (b) below) Donation income Insurance claim Donations of non monetary assets (See note (c) below) Profit and loss on sale of shares

2015 2014

973 554 847 104 74 893

4 210 19 280 89 580

2 025 OOO 474 683 102 716

1 452 447 3158 573

(a).Irish Aid Civil Society Fund {CSF014-1401) was granted to the Irish registered charity, Friends in Ireland with the understanding that it would be transferred to and expended by the South African Friends in Ireland Trust. (to be read in conjuction with Note No's: 7 and 9).

(b). Grant from National Development Agency (to be read in conjunction with Note No's: 7 and 9)

(c). Fair value of buildings erected by Mellon Educate on DIC and EDC sites for use in the furtherance of their charitable activities.

9. Grant income brought forward/(carried forward to future periods) - net movement

Irish Aid Civil Society Fund National Lotto Distribution Trust Fund National Development Agency

10. Investment revenue

Dividend revenue Listed portfolio - Local

Interest revenue Financial institutions

14

(9 321) (847 104) 301 007 48 528

243 514

291 686 (555 062)

87 214 68 922

241 466 360 793

328 680 429 715



Figures in Rand

11. Resources expended

Charitable Activities Governance Costs

2015

2 113 496 864 294

2 977 790

2014

4 801 838 733 949

5 535 787

Resources expended are analysed between costs of charitable activities and governance costs. The costs of each activity are separately accumulated, disclosed and analysed according to their major components.

Support costs, which cannot be attributed directly to any one programme, are allocated in proportion to estimated staff time input.

Charitable activities Drop In Centre (DIC) Early Childhood Development (ECD) Community Based Organisation Development (CBO)

1 464 975 458 933 189 588

3 268 928 1 347 019

185 891

2 113 496 4 801 838

Costs of charitable activities comprise all expenditure incurred by The Trust in meeting its charitable objectives.

Governance Costs Professional fees and other costs Direct costs

253 390 610 904

864 294

101 265 632 684

733 949

Governance costs are those associated with the stewardship of The Trust in meeting its charitable objectives, together with related direct costs.

Direct Costs Drop in Early Community Governance 2015 2014 Centres Childhood Based Costs

(DIC) DevelopmentOrganisation (ECD) Development

(CBO) Programme Management 471 835 177 304 3 049 391 631 1 043 819 3 481 358 Travel & Logistics 51 339 34 226 24 447 65 204 175 216 193 332

Staff Costs 828 273 199 248 160 969 154 069 1 342 559 1 566 431 Other Support Costs 113 528 48155 1 123 162 806 193 403

1 464 975 458 933 189 588 610 904 2 724 400 5 434 524

12. Cash used in operations

Deficit before taxation (904 977) (2 202 561)

Adjustments for: Depreciation and amortisation 182 227 138 483

Surplus on sale of assets (474 683) (102 716)

Dividends received (87 214) (68 922)

Interest received - investment (241 466) (360 793)

Impairment (3 037) 25 773

Other non-cash items 37 270

Changes in working capital: Trade and other receivables (901 502) (65 688)

Trade and other payables (3 049) (2 642)

Deferred income - Grants (291 686) 555 063

(2 688 117) (2 084 003)

15

financial statements for the year ended 31 december 2015 · financial statements for the year ended...

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