PUBLIC RELATIONS SOCIETY OF KENYA ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

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1 ANNUAL REPORT AND FINANCIAL STATEMENTS CONTENTS PAGE NO. EXECUTIVE COMMITTEE AND PROFESSIONAL ADVISERS 2 REPORT OF THE EXECUTIVE COMMITTEE 3 STATEMENT OF THE EXECUTIVE COMMITTEE'S RESPONSIBILITY 4 REPORT OF THE INDEPENDENT AUDITORS 5 FINANCIAL STATEMENTS: INCOME AND EXPENDITURE STATEMENT 6 BALANCE SHEET 7 CASH FLOW STATEMENT 8 NOTES TO THE FINANCIAL STATEMENTS 9-12

2 EXECUTIVE COMMITTEE AND PROFESSIONAL ADVISERS EXECUTIVE COMMITTEE MEMBERS Jane Gitau Chairman Sylvia Mwichuli Vice chairman Angela Ng'ang'a Secretary Samuel Karanja Assistant Secretary Musyoki Kividyo Treasurer Beatrice Kung'u Assistant Treasurer Edna Onchiri Member Eunice Muthamia Member Philiph Cheruiyot Member Raphael Mworia Member REGISTERED OFFICE AUDITORS BANKERS Liaison House, State House Avenue P.O. Box Nairobi Gituara & Associates Certified Public Accountants Aparment 23, Lowerhill Duplex Upperhill Road. P.O. Box Nairobi, Kenya. Barclays Bank of Kenya Limited Queensway House Branch P.O. Box Nairobi

3 REPORT OF THE EXECUTIVE COMMITTEE The Executive Committee presents its report and the audited financial statements for the year ended 31 December PRINCIPAL ACTIVITIES The Public Relations Society of Kenya is a non political and non profit making organisation registered under the Societies Act. Its day to day operations are governed by its own constitution. The principal activity of the Society is to establish and promote a high standard of professional ethics, to educate and inform the public as to the purpose and practice of public relations and to encourage and assist in the professional training in public relations. RESULTS Surplus / (deficit ) for the year transferred to Accumulated 3,863,034 50,253 EXECUTIVE COMMITTEE The executive committee members who held office during the period and to the date of this report are shown on page 2. AUDITORS Gituara & Associates have expressed their willingness to continue in office. By the order of the committee. Chairman Nairobi. Date

4 STATEMENT OF EXECUTIVE COMMITTEE MEMBERS' RESPONSIBILITY The Committee is required to prepare financial statements for each financial year that give a true and fair value of the state of affairs of the Society as at the end of the financial year and of its surplus or deficit. The committee is also required to ensure that the Society keeps proper accounting records which disclose, with reasonable accuracy, at any time the financial position of the Society. They are also responsible for safeguarding the assets of the Society. The Executive Committee accepts responsibility for the annual financial statements, which have been prepared using appropriate accounting policies supported by reasonable and prudent judgments and estimates, in confirmity with International Financial Reporting Standards. The Committee is of the opinion that the the financial statements give a true and fair view of the state of affairs of the Society and of its surplus/ deficit. The committee further accepts responsibility for the maintenance of accounting records which may be relied upon in the preparation of the of the financial statements, as well as adequate systems of internal financial control. Nothing has come to the attention of the Committee to indicate that the Society will not remain a going concern for at least twelve months from the date of this statement. This statement was approved by the committee on... and signed on its behalf by: Chairman Treasurer

5 REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF PUBLIC RELATIONS SOCIETY OF KENYA We have audited the financial statements of the Public Relations Society of Kenya set out on pages 6 to 12 which comprise the balance sheet as at 31December 2015, and the income and expenditure statement, statement of changes in reserves and fund balances and cash flow statement for the year then ended, together with the summary of significant accounting policies and other explanatory notes, and have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of our audit. Respective responsibilities of committee and auditors The society's executive committee is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards. This responsibility includes: designing, implementing and maintaining internal controls 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. Our responsibility is to express an opinion on these financial statements based on our audit. Basis of opinion 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 as to 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 our judgement and include an assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we considered internal controls 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 executive committee, as well as the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. Opinion In our opinion, proper books of account have been kept and the financial statements, which are in agreement therewith, give a true and fair view of the state of the association's financial affairs at 31 December 2015 and of its deficit and cash flows for the year then ended and comply with International Financial Reporting Standards. Gituara & Associates Certified Public Accountants (Kenya) 2016

6 FINANCIAL STATEMENTS INCOME AND EXPENDITURE STATEMENT NOTES INCOME Subscriptions 2,144,963 2,395,000 Membership fee 532, ,500 Surplus/(deficit) from self financing funct 4 2,454,493 (313,173) Total income 5,131,956 2,655,327 EXPENDITURE Membership recruitment AGM 0 181,161 Donation Bank charges 167,733 99,831 Secretariat expenses 696, ,000 Office stationery 62,149 70,336 Accountancy and audit 105,600 92,800 Executive committee expenses 11, ,655 Sub-committee allowances 0 12,000 Subscriptions 79, ,911 Patron's Forum 0 131,940 Advocacy 60, ,360 Research 15,000 - Telephone & Postage 69,600 4,080 Depreciation 1,012 - Legal fee 0 151,000 Total expenses 1,268,922 2,605,074 Net surplus/(deficit) for the year 3,863,034 50,253

7 BALANCE SHEET AS AT 31 DECEMBER NOTES ASSETS Fixed Assets Furniture 9 7,086 0 Current assets Receivables 5 5,204,944 6,055,947 Cash and cash equivalents 6 3,357,401 (33,661) 8,562,345 6,022,286 Current liabilities Sundry creditors 7 3,840,428 5,156,317 Net current assets 4,721, ,969 Net Assets 4,729, ,969 MEMBERS' FUNDS, RESERVES AND LIABILITIES Reserves Members' funds and reserves 4,729, ,969 The financial statements were approved by the Committee on and signed on its behalf by: Chairman:. Treasurer:

8 STATEMENT OF CHANGES IN MEMBERS FUNDS AND RESERVES Total Accumulated Fund Year ended 31 December 2014 At 1 January ,716 Surplus/ deficit for the year 50,253 At 31 December ,969 Year ended 31 December 2015 At 1 January ,969 Surplus/ deficit for the year 3,863,034 At 31 December ,729,004

9 CASHFLOW STATEMENT OPERATING ACTIVITIES NOTES Cash generated from the operations 8 3,398,148 (425,587) Add back depreciation 1,012 0 Interest received 0 0 Net cash from /(used in) operating activities 3,399,160 (425,587) INVESTING ACTIVITIES Purchase of fixed assets (8,098) 0 Increase /(decrease) in cash and cash equivalents 3,391,062 (425,587) MOVEMENT IN CASH AND CASH EQUIVALENTS As at 1 January 2015 (33,661) 391,926 Increase /(decrease) in cash and cash equivalents 3,391,062 (425,587) As at 31 December ,357,402 (33,661)

10 ACCOUNTING POLICIES 1. Significant Accounting Policies The principal accounting policies adopted in the preparation of these financial statements are set out below: a). Basis of preparation The financial statements are prepared in accordance with and comply with International Financial Reporting Standards. The financial statements are presented in Kenya Shillings (.) and are prepared under the historical cost convention. The preparation of financial statements in conformity with IFRS requires the use of estimates and assumptions. It also requires management to exercise its judgment in the process of applying the society's policies. The areas involving a higher degree of judgment or complexity, or where assumptions and estimates are significant to the financial statements, are disclosed in Note 3. b). Revenue recognition Subscription and membership fee income is recognised when received. Other income is recognised upon performance of the services, unless collectability is in doubt. Interest Income is recognised as it accrues. c). Property, plant and equipment All categories of property, plant and equipment are initially recorded at cost and thereafter at historical cost less depreciation. Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the society and the cost can be measured reliably. All other repairs and maintenance are charged to the profit and loss account during the financial year in which they are incurred. Property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of the asset's fair value less costs to sell and value in use. Gains and losses on disposal of property, plant and equipment are determined by reference to their carrying amounts and are taken into account in determining operating profit. (d). Financial Instruments Financial instruments are recognized on the society's balance sheet when the society becomes a party to the contractual provisions of the instrument. Specific accounting policies adopted by the society in accounting for ffinancial instruments outstanding at year end are summarised below: Trade and other receivables Trade and other receivables are carried at their original invoiced amount less an estimate made for doubtful receivables based on the review of all outstanding amounts, on by account basis, at the year end.bad debts are written off in the year in which they are identified as not collectible. Financial Liabilities Financial liabilities are stated at amortised cost. Amortised cost of a financial liability is the amount at which the financial liability was measured at initial recognition less principal repayments, plus accrued interest on the outstanding principal.

11 ACCOUNTING POLICIES (e). Provisions Provisions for liabilities are recognised when there is a present obligation (legal or constructive) resulting from a past event, and it is probable that an outflow of economic resources will be required to settle the obligation and a reliable estimate can be made of the monetary of the obligation. (f). Foreign currency translation Assets and liabilities which are denominated in foreign currencies are translated into Kenyan shillings at the rates ruling on the balance sheet date, Transactions during the period are translated at the average rates ruling during the period. Gains and losses are dealt with in the income statement. (g).income tax The society is legible for exemption from income tax under Section 13(2). The application for exemption has been lodged with the Commissioner of Income Tax. (h).cash and cash equivalents For the purpose of the cash flow statement, cash and cash equivalents comprise cash in hand,cash in bank and fixed deposits. 2.Financial risk management objectives and policies The society's activities expose it to a variety of financial risks, including credit risks and effects of forex rate changes and fluctuations in interest rates. The society's overall risk management programme focuses on unpredictability of changes in the business environment and seeks to minimise the potential adverse effects of such risks on its performance by setting acceptable levels of risks. The society has policies in place to ensure that services are offered to clients with appropriate credit history. 3.Critical accounting estimates and assumptions Estimates and judgments are continually evaluated and are based on historical experience and other factors, including experience of future events that are believed to be reasonable under the circumstances. i). Critical accounting estimates and assumptions Critical assumptions are made by directors in determining depreciation rates for property, plant and equipment. The rates used are set out in Note 1 ( c) above. ii). Critical judgments in applying the entity's accounting policies In the process of applying the entity's accounting policies, management has made judgments in determining the classification of financial assets and whether assets are impaired. 4.Surplus/(Deficit) from self financing functions Surplus Surplus Receipts Expenses (Deficit) (Deficit) Annual confrence 917, , ,205 (160,407) Education & Trainin 4,115,579 2,127,291 1,988,288 (592,956) WPRF ,190 Total 5,032,579 2,578,086 2,454,493 (313,173)

12 NOTES TO THE FINANCIAL STATEMENTS 5.Receivables Corporate/institutional 5,396,944 5,600,151 WRFP Deposit (192,000) 455,796 5,204,944 6,055,947 6.Cash and cash equivalents Cash at bank 3,357,401 (33,661) Cash in hand 0 0 3,357,401 (33,661) For the purposes of the cash flow statement, cash and cash equivalents comprise cash in hand and deposits held at call with banks, net of bank overdrafts. In the balance sheet, bank overdrafts are included in borrowings in the current liabilities. The year end cash and cash equivalents compromise the above. 7.Sundry creditors Sundry creditors and accruals 3,840,428 5,156,317 3,840,428 5,156,317 8.Cash generated from operations Reconciliation of surplus/(deficit) to cash generated from operations: Surplus/(deficit) for the year 3,863,034 50,253 Adjustment for: Changes in working capital: Debtors 851,003 (1,851,270) Sundry creditors (1,315,889) 1,375,430 Cash generated from operations 3,398,148 (425,587) 9.Depreciation As at 1st January 2015 Additions 8098 Depreciation (1,012) AS at 31st Dec Country of incorporation and registered office The Society is a body corporate established under the Societies Act and domiciled in Kenya. The address of its registered office is: Liaison House, State House Avenue P.O. Box Nairobi 11.Currency These financial statements are presented in Kenya shillings ().